Refinery Town Read online

  In 2012 Richmond progressives paid a heavy political price for their soda tax advocacy. For the first time since the RPA started running candidates, none of them won. The combined Richmond election spending of Big Soda and Big Oil totaled about $3.7 million—setting a local record not broken even two years later. Worst of all, Big Soda’s successful racialization of the Measure N debate threw local progressives on the defensive in an election held just a few months after the Chevron fire, which should have been a boon to RPA candidacies. “We did a bad job,” one RPA strategist admitted. “We did not realize what was coming and we didn’t build strong enough coalitions with the black community.” With Ritterman’s departure from the council (and the electoral defeat of Marilyn Langlois and Eduardo Martinez), the RPA delegation was reduced to two—McLaughlin and Beckles.

  AN EMINENT DOMAIN SOLUTION

  Big Soda elbowed aside Big Oil as a source of local controversy only until it was time for the banksters to become the next subject of Richmond political rumbling. The burst of the housing bubble, our nation’s related Wall Street meltdown, and subsequent bank foreclosures hit Richmond particularly hard. In the city’s Iron Triangle neighborhood, the 2007–2008 crisis devastated housing prices, with some homes losing 75 percent of their value. Even Point Richmond, with its funky but tonier mix of apartment buildings, private homes, and, on one side of the hill, sweeping views of the bay, saw real estate prices halved.

  In 2012 Richmond had nine hundred foreclosures. By the end of 2013, 50 percent of Richmond homeowners were still saddled with underwater mortgages, and many owed an amount twice the current value of their property. Foreclosures forced poor and working-class families out of their homes, often leaving vacant dwellings behind, which contributed to neighborhood blight and further depression of local property values. In the “zombie houses” of South Richmond, Santa Fe, and Coronado, squatters moved in, exacerbating problems like drug dealing, gang activity, and flight from the city by those who could afford to leave.

  With no effective relief in sight from any other level of government, Richmond city hall joined forces with the Alliance of Californians for Community Empowerment (ACCE) to unveil a program they called Richmond Cares. Mayor McLaughlin accused the banking industry of creating the crisis with its “predatory lending policies” in Richmond and other cities. At the mayor’s initiative, a city council majority voted to use the threat of eminent domain to force mortgage lenders to renegotiate the terms of their housing loans. That way Richmond residents who qualified for the program could hold on to their homes.

  As McLaughlin explained, her approach would help “people who are underwater, who have mortgages higher than the current value of their home. The city will purchase these loans at fair market value from the banks and reset the mortgages in line with the homes’ current value. Then we’ll put these refinanced loans, with lower mortgage payments, into the hands of our homeowners. That way, they can continue to stay in our community and our neighborhoods will remain stable. They can avoid going into default, experiencing foreclosure and eviction, and having to walk away from their home. If lenders don’t cooperate, we have the option of acquiring the properties through eminent domain, again paying fair market value.”

  Big mortgage holders, like Wells Fargo, Bank of New York Mellon, and Deutsche Bank, did not favor this scenario. Like the ABA trying to block a first-time-ever local soda tax, the banking and real estate industries wanted to strangle Richmond Cares in the cradle before it could become a model and precedent for other cities. An industry bid for injunctive relief in federal court was denied because the city’s eminent domain powers had not yet been exercised. So the well-funded critics of Richmond Cares stepped up their nonelection-year “air war” to sway public opinion against it.

  The National Association of Realtors bombarded Richmond homeowners with slick mailers warning of the dire consequences of McLaughlin’s “radical scheme.” Among these were redlining by Richmond’s municipal bond holders and a lending institution boycott that would send property values plummeting even further. “If the eminent domain plan goes into effect, lending for new home buyers will dry up, home values will decline, and neighborhoods will be hurt,” claimed one brochure from the West Contra Costa Realtors Association.

  The industry’s message was carefully designed to pit neighbor against neighbor: if you were paid up on your mortgage, why should you care about others in Richmond who should never have bought a home with so much borrowed money to begin with? The campaign by bankers, realtors, and builders against Richmond Cares also drove away much-needed allies on the city councils of neighboring communities. Some of these leaders had initially expressed interest in joining the anti-foreclosure fight, wielding their own eminent domain powers, and then sharing with Richmond the cost and risk of litigation.19

  Richmond Cares generated national publicity for McLaughlin’s administration, most of it favorable. Yet there was one aspect of the program that critics were quick to question, and it aroused some concern on the left as well. Just as the success of the campaign against the Point Molate casino included a strange political bedfellow—local card clubs—Richmond’s proposed use of eminent domain was an idea of mixed provenance. As McLaughlin acknowledged, it was San Francisco-based “Mortgage Resolution Partners (MRP), a private company, that actually brought this idea to us. The city has a formal agreement with MRP that they will provide the funding and technical assistance in purchasing these mortgages. It will not cost the city of Richmond or its taxpayers one penny.”

  As Rebecca Burns reported for In These Times, the venture capital firm had been shopping its plan to other cities for some time. Under the terms of its proposed private-public partnership, MRP “would take a cut on each mortgage acquired through eminent domain in return for providing the necessary capital backing.” In Richmond, that would mean “primarily buying mortgages where the homeowner is current on payments” but not necessarily coming to the rescue of homeowners with second liens increasing the risk of foreclosure.20 “In an ideal world,” said liberal journalist Robert Kuttner, “you would not be reliant on a renegade Wall Street group to come up with the capital, but it’s what we’ve got for now.”21

  For its part, the ACCE did essential door-to-door work, educating and mobilizing local homeowners who were getting barraged with anti–Richmond Cares propaganda. ACCE organizers like twenty-three-year-old Melvin Willis helped them resist evictions, seek renegotiation of their mortgage loans, and protest the deceptive lending practices that victimized minority home buyers in Richmond and other cities. At a September 2013 meeting attended by three hundred people, the city council voted 4 to 3 to resist industry pressure and pursue, to the extent possible, McLaughlin’s anti-foreclosure initiative. Actual use of the city’s eminent domain powers required a “super majority” of five, only unattainable if voters in 2014 replaced one of the council opponents of Richmond Cares.

  Richmond’s anti-foreclosure initiative might have gone further if like-minded progressives had wielded greater influence in neighboring communities. Yet even the ACCE, with multiple local chapters and a statewide staff, was unable to get any other city to go as far as Richmond did. In late 2014 President Obama prevented further spread of the Richmond Cares concept when he signed a bill passed by Congress forbidding any federal role in mortgage financing of homes taken by eminent domain. As a fallback approach, McLaughlin got the Richmond council to support a “Foreclosure Prevention and Neighborhood Stabilization Program” promoted by ACCE.

  Under this program banks and federal agencies would “offer their distressed mortgages first to non-profit organizations to help keep homeowners in their houses and rents low through reduced monthly payments.”22 At the US Conference of Mayors meeting in San Francisco in mid-2014, the mayors of Richmond, Berkeley, Oakland, San Jose, and fourteen other cities lobbied for this approach because “HUD, Fannie Mae, and Freddie Mac have millions of distressed mortgages on their books but don’t assist families who are struggl
ing with payments.” As McLaughlin told a reporter: “There’s a better path here than selling these mortgages to speculators and hedge funds.”23

  Similar networking by McLaughlin and other progressive city officials helped build Local Progress, a policy clearinghouse backed by four hundred mayors, city councilors, and county supervisors. Assisted by the Center for Popular Democracy in New York, the group offers a sixty-page guide to improving local labor and environmental standards, housing and education, policing, voting rights, and financing of elections.24 It also holds annual conferences, with workshops and presentations by mayors like McLaughlin and New York’s Bill de Blasio. At these gatherings, local victories are celebrated and setbacks like that of the Richmond Cares campaign can be dissected. Local Progress strategists believe that neither street politics nor electoral victories alone will make a sufficient dent in the status quo. To counter corporate influence, progressives need what Local Progress chair Nick Licata called “an outside and inside game . . . people on the inside and people protesting on the outside to provide insiders with backbone.”25

  RICHMOND’S SISTER COUNTRY

  Throughout her two mayoral terms, Gayle McLaughlin faced reoccurring objections to her international activities. Many American cities have sister-city relationships, designed to promote global understanding and cross-border solidarity. Such partnerships are either developed by local civic organizations or municipalities themselves. The latter type tend to be noncontroversial, like the sister city projects and exchanges that Richmond has conducted over the years with communities in Japan, China, and Cuba (although linking up with the Cuban refinery town of Regla was a more daring political statement at the time).

  But Richmond under Gayle McLaughlin was virtually alone among North American cities in forging direct ties with another country. Its solidarity relationship with Ecuador grew out of the shared experience of environmental pollution and resulting litigation against Chevron. In mid-October 2013, at the invitation of Ecuador’s left-wing populist president, Rafael Correa, McLaughlin and a small local delegation flew off to Quito, accompanied by East Bay Express reporter John Geluardi. After conferring with Correa at the presidential palace in Quito, McLaughlin’s party flew to the hot and humid Lago Agrio rain forest, where a large media contingent awaited their arrival. With President Correa leading the way, the US visitors personally inspected one of the hundreds of sludge pits that mar the local landscape and contain millions of gallons of toxic waste. “Gayle, Gayle,” Correa said, holding up his goo-covered hand. “This is Chevron. For thirty years, this is Chevron!”26

  Correa’s visitors from California then met with the mayors of Lago Agrio and neighboring Shushufindi. As Geluardi reported from the scene, residents of both communities recited a litany of health problems in the area, including skin infections, miscarriages, birth defects, and rare cancers. “Texaco—now Chevron—clearly disregarded the environment and simply disposed of its toxic products in the most cost-saving way,” McLaughlin said. “They just tossed them into the rivers, streams and roads. As a result the indigenous people who drank from and bathed in the rivers, cooked their food and washed their clothes in the water, suffered monumentally and continue to suffer.”27

  During her six-day visit, which coincided with Richmond’s celebration of Hispanic Heritage Month back home, McLaughlin invited members of the Union of Affected People and their courageous local lawyer, Pablo Fajardo, to visit California and report on their Chevron lawsuit. Back home, she and the RPA also arranged for a public screening of Crude: The Real Price of Oil, a documentary about the Ecuadoran lawsuit against Chevron. Even though it was conducted at foreign government expense, McLaughlin’s fact-finding mission to Ecuador drew political flak from the usual direction.

  Chevron issued a statement saying that the mayor “would better serve the citizens of Richmond” by staying home and “constructively addressing the city’s most pressing issues, including jobs, education, and public safety.” Chip Johnson, a columnist for the San Francisco Chronicle, similarly chided McLaughlin for “intertwining her personal politics with the duties and responsibilities of her elected office.” In Johnson’s view, holding “the company accountable for environmental damage in Ecuador seems a little bit beyond her job description.”28

  McLaughlin was typically unrepentant. “Chevron is not only polluting our air and water,” the mayor said. “They’re polluting our politics and legal system. So we’re building an international ‘union of affected people’ that can turn our shared pain and suffering into the power to change things.”

  In March 2014 McLaughlin reached out to a group of affected people in Canada who had, like the Ecuadorans, quite a story of pain and suffering to share. At a packed public meeting organized in response to crude-by-rail shipments to Richmond, the mayor welcomed Marilaine Savard from the Citizens Committee of Lac-Mégantic, Quebec. In French-accented English, this slim, sad-eyed woman described the federal regulatory lapses that proved fatal to forty-seven of her friends and neighbors. Nine months earlier, a runaway “bomb train”—improperly braked by its single-man crew—had barreled into Savard’s rural community. The resulting derailment and explosion obliterated its entire downtown. “The oil industry is far too powerful,” she told a crowd of 150, packed into RPA headquarters. “The first duty of government should be to protect citizens, not shareholders.”

  Locally Big Oil’s clout was on display in a new form, as far as the eye could see in the sprawling Richmond rail yard located just across the street from the Chevron refinery. Operated by Burlington Northern Santa Fe Railway (BNSF), the rail yard was now filled with hundreds of black, metal tank cars. These had just carried the same volatile form of crude oil that destroyed Lac-Mégantic, all the way from the Bakken fields of North Dakota to a transfer facility located right next to Richmond’s oldest residential and business neighborhood. Kinder Morgan, a major energy firm, stored up to seventy-two thousand barrels per day there, under a lease agreement with the BNSF, which is owned by Nebraska billionaire Warren Buffett. The crude-by-rail shipments were then loaded onto tanker trucks bound via local streets and a state highway for the Tesoro refinery in Martinez, California.

  In 2014–2015 hazards of transporting Bakken crude were highlighted by a series of major train fires and explosions. As labor and environmental critics pointed out, the Achilles’ heel of crude-by-rail everywhere is the aging condition and structural weakness of most tank cars. They were designed and used in the past for hauling less hazardous cargo. According to the Association of American Railroads’ own estimate, “78,000 of the 92,000 cars now moving oil need to be replaced or retrofitted.”29 Meanwhile, the US Department of Transportation failed to mandate tank car modernization and upgrading in timely fashion. Chevron and the rest of Big Oil objected to “forcing oil producers and shippers to use newer tank cars and replace older models” because that “would impose high costs on the industry and lead to a shortfall in tank car capacity.” Chevron’s industry-wide lobbying arm, the American Petroleum Institute, filed a legal challenge to “new federal rules intended to improve the safety of oil-by-rail transportation,” further delaying “a two year-effort to reduce the risks of moving hazardous materials on railroads.”30

  Even newer, supposedly safer tank cars have sometimes failed to protect the public from the consequences of oil train collisions, rollovers, tank car ruptures, and spills. The total amount of oil spilled in 2013 due to derailments was greater in volume than all the spills occurring in the United States during the previous forty years. One major accident in West Virginia triggered a fire that burned for five days, forced the evacuation of two nearby towns, and seriously threatened local water supplies.

  Despite this alarming track record, the Bay Area Air Quality Management District (BAAQMD) board issued the permit necessary to bring Bakken crude into Richmond in secret. There was no prior notice, nor were there any public hearings or environmental impact review. Outraged when they discovered this, Communities for a Bett
er Environment, the Sierra Club, and the Asian Pacific Environmental Network filed suit to block Kinder Morgan from operating in Richmond. The Richmond city council backed revocation of its permit and urged Congress to halt all Bakken crude shipments until tougher federal safety rules could be implemented. Unfortunately, a superior court judge in San Francisco dismissed the permitting challenge on the grounds that it wasn’t timely. This unhelpful ruling was appealed but never overturned.

  Seven months after Savard’s visit, local environmentalists took the fight directly to Kinder Morgan’s front door. With well-organized backup teams, reporters covering their action, and a legal consultant on hand, eight protestors chained themselves in pairs to a rail yard fence, using bicycle U-locks. This had the effect of blocking trucks from entering the main gate. It also created a three-hour impasse between the Richmond police and a security officer from BSNF since the trespassing occurred on railroad property beyond the RPD’s jurisdiction. The railroad cop initially seemed intent on pressing some kind of federal charges, more serious than trespassing.

  Thanks to the intervention of local officers, the demonstrators were allowed to leave after being identified, with no citations issued or charges pressed. Per usual when there was a protest scheduled in Richmond, Gayle McLaughlin was at the scene—this time watching from the sidelines. As one participant from Oakland, Margaret Rossoff, reported, the mayor offered her warm congratulations. Then, adding to Rossoff’s surprise, “the Richmond officers lined up to shake our hands.” This parting gesture made the Sunflower Alliance member feel like she was on “a receiving line at a wedding or bar mitzvah,” rather than wrapping up “a non-violent direct action protest!”31 It was not the reception she might have gotten in her own hometown or any other place yet to undergo its own greening of city hall.