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Oakland Coal’s Wheel of Influence

Leaked documents about the effort to sell a coal terminal to a reluctant city show how the government sausage gets made.

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Last year's Oakland City Council election provided supporters of the controversial proposal to ship coal through Oakland with a potential opportunity to find common ground with city officials. The November election ushered in three new members of the eight-person council: Nikki Fortunato Bas, Loren Taylor, and Sheng Thao. To honor those new members, the Oakland Builders Alliance held a January reception for them at downtown's posh Rotunda Building.

The soiree represented an opportunity for Insight Terminal Solutions, the Utah company hoping to transport coal and its byproducts through the Oakland port terminal. At the party, company founder and CEO John Siegel spoke briefly with each of the new councilmembers, hoping to gain insights into where each member stood on the contentious issue. Siegel's goal was to gauge whether an amicable solution could be reached in the dispute over whether to allow coal to be shipped through the $275 million Oakland Bulk and Oversized Terminal near the mouth of the Bay Bridge.

In a leaked memo from the CEO to his investors, Siegel communicated that he believed councilwoman Thao wanted a quick resolution. Meanwhile, despite preconceived notions about Bas and Taylor, he expressed surprise that both of them also appeared amenable to discussing the matter further.

Based on outward appearances, Bas would seem to be an unlikely ally for coal; her upset of councilman Abel Guillen last year was accompanied by a heavy dose of populism. Yet Siegel believed that he spied a potential opening with Bas. "I was surprised at her receptivity as she had been characterized as one who would align herself with the mayor," Siegel wrote of Bas. Siegel also expressed surprise that Taylor appeared interested in hearing his side of the story — as opposed to what the CEO characterized as "all of the Sierra Club's propaganda." Siegel wrote that Taylor had been characterized to him as "one who would sit the fence, but he seemed to be also very receptive about sitting down and getting to know more about what is different about our project."

In 2014, acting on behalf of another company, Siegel had signed a contract with terminal developer Phil Tagami to potentially lease and operate the export facility. Siegel's first company dissolved in 2018 and Insight Terminal Solutions, which featured several of the same key players, then signed an exclusive option agreement to operate the terminal at the former Oakland Army Base, which the city owns.

Although the flamboyant Tagami has come to be seen as the public face of the Oakland coal project, he is merely the developer hired by the city to transform the former base into an economic engine for Oakland. Siegel and Insight Terminal Solutions are the coal experts, and they have been the primary drivers of the effort to ship the commodity through Oakland.

In a revealing memo and log of meetings that was obtained by the East Bay Express, Siegel provided an intimate look into the multi-pronged approach that special interests such as his company use to get their pet projects in front of elected officials. Over the course of roughly nine months, he and other officials from the Kentucky-based company traveled to the nation's capitol, Florida, Georgia, Illinois, Utah, Japan, and, especially, Oakland for at least 23 separate meetings with elected officials, consultants, lobbyists, labor leaders, community activists — even a blogger and a football player.

The purpose of Siegel's wide-ranging lobbying campaign was to overturn the city council's 2016 ban on the storage and handling of coal and petroleum coke in the city of Oakland. Meanwhile, Tagami's company has waged a parallel court battle to overturn the ban, aided by funding from Siegel. As of this date, the legal efforts have been far more successful than the lobbying campaign. Last year a federal judge ruled that the city had breached its 2013 contract with the developer. The city is appealing its loss. Opening arguments in the case began earlier this month.

The two-page memo from Siegel to his investors is not particularly nefarious in any sense. It's basically just one man's recipe for how to make sausage at Oakland City Hall. Siegel's formula included meeting with sympathetic GOP officials, enlisting the aid of lobbyists and other influencers, and attempting to win over influential members of the community — all with an eye toward flipping the city council.

Here's what the plan looked like:


Friends of Coal: Federal Officials

Most lobbying efforts in Oakland typically focus solely on the city government, and some also include state legislators in Sacramento. But few rise to the federal level. Because the Insight Terminal Solutions' proposal crosses over many state lines, Siegel, reached out to some of the highest levels of the Trump administration and Congress for help.

It's no secret that the Republican Party establishment is strongly aligned with the fossil fuel industry. Climate change deniers make up a sizable of its leadership, including President Trump, himself.

In October 2018, a team led by Siegel met with Transportation Secretary Elaine Chao to discuss Oakland coal. According to the travel log, one of the aims of meeting with Chao was to seek additional face-time with U.S. Energy Secretary Rick Perry and Commerce Secretary Larry Kudlow. Also at the meeting in Washington, D.C., was Ronald Batory, the administrator of the Federal Railroad Administration and Admiral Mark Buzby, administrator of the U.S. Maritime Administration.

Siegel's team then met in early December 2018 with Senate Majority Leader Mitch McConnell. Presumably this meeting was less difficult to schedule, since McConnell is married to Chao. In addition, like McConnell, Siegel is also a Kentuckian.

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