The Oakland City Council spiked a modest proposal to strengthen an agency that investigates public corruption and ethics violations. The decision has raised eyebrows among Oaklanders who just last week witnessed the FBI raid the home of Mayor Sheng Thao and properties belonging to the city’s recycling contractor, California Waste Solutions.
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The council voted 5-3 on Wednesday to reject a proposed ballot measure to improve Oakland’s Public Ethics Commission—a volunteer board charged with enforcing the city’s rules around campaign finance, lobbying, and government transparency. The commision has a small staff of professionals who investigate alleged corruption in city government and elections.
Councilmembers Nikki Fortunato Bas, Dan Kalb, and Janani Ramachandran were the minority in support of the plan.
Among several enhancements, the measure would have banned lobbyists from giving gifts worth over $50 to elected officials and their families and added one new investigator to the commission’s minimum staffing requirement.
The commission currently only has two investigators to handle 140 cases, which include a range of wrongdoing, everything from councilmembers’ conflicts of interest to alleged campaign finance violations to city staff accepting bribes. The PEC’s lack of staff has caused a severe backlog and prevented the commission from completing investigations in a timely manner. Commission Chair Ryan Micik told the City Council during their meeting Wednesday that the situation hampers their ability to hold lawbreakers accountable and save the city money.
“The purpose of this proposal is simply to enhance Oaklanders’ trust in government,” Micik said, adding that it would “establish the PEC more firmly as a vigorous, independent entity free of political influence.”
Council President Nikki Fortunato Bas urged her colleagues to support the measure, which was originally authored by the commission before Councilmember Kalb introduced an amended version. Bas cited the fact that Oakland is currently being roiled by multiple political scandals.
“There is an ongoing investigation of our former mayor; there is a very old investigation that is very timely in terms of what’s in the newspapers, that includes people who currently serve and have served on this dais,” Bas said. “And if the public doesn’t have somewhere to go to hold elected officials or staff accountable in the city of Oakland, we are not advancing democracy.”
Bas referenced an investigation ethics investigators are pursuing against Oakland’s former mayor Libby Schaaf. According to confidential records, Schaaf allegedly broke campaign finance law by secretly raising tens of thousands of dollars from contractors who were barred from giving money to committees controlled by politicians. The commission recently fined Lyft $50,000 for its alleged role in this affair.
Bas also referenced an investigation the commission has been pursuing since 2019 against California Waste Recycling. Andy Duong, whose family owns the recycling company, allegedly funneled tens of thousands of dollars to favored candidates in Oakland between 2016 and 2018 using “straw donors”—people who agreed to contribute to campaign committees in exchange for reimbursements. Straw donors gave money to Dan Kalb, Rebecca Kaplan, Lynette Gibson McElhaney, Larry Reid, Abel Guillen, Desley Brooks, and Sheng Thao, who was a councilmember at the time.
Duong’s house was raided last week by the FBI, as was the home of his father, David Duong. It’s unclear if the federal search is related to the PEC’s investigation.
Five councilmembers say funding the PEC is too expensive as Oakland faces a massive budget crunch
These arguments didn’t persuade the five councilmembers who voted against the measure: Rebecca Kaplan, Carroll Fife, Noel Gallo, Kevin Jenkins, and Treva Reid. While expressing support for the commission, they balked at spending any extra money.
“We’ve gotten over hundreds and hundreds of emails today, all of us, about potential budget cuts, and we’re spending money that we do not have,” said Jenkins.
Oakland faces a projected $177 million deficit in its general-purpose fund in the next fiscal year, which begins on July 1. The City Council is meeting tomorrow to finalize a budget that will balance that shortfall. The city is counting on money from the sale of Oakland’s stake in the Coliseum to the African American Sports and Entertainment Group. The city has also frozen hiring in departments, proposed cutting vacant budgeted positions, and tightened expenditures.
The city recently published a backup budget the council could implement if the Coliseum deal collapses or proceeds don’t hit the city’s coffers by September. City officials said this was done out of an abundance of caution and to signal to Oakland’s bondholders that the city is preparing for every contingency. However, many news outlets misinterpreted this backup budget as the proposal the City Council has been discussing and is supposed to vote on tomorrow. Bas indicated that the budget decision could be delayed several days.
Still, the city’s budget situation is rough and several councilmembers said they’re unwilling to fund anything right now that they don’t view as essential.
“I cannot in good conscience at this time move forward legislation that would require ongoing revenue to support key positions,” said Councilmember Carroll Fife, who also voted against the proposal. “I would be voting for this in better financial times, but this is a financial decision for me.”
Councilmember Kalb repeatedly clarified that the ballot measure would only add one position to the commission’s staff, and only starting in 2026. He also pointed out that the City Council would have the option of not funding this new position if Oakland was still in a fiscal crisis.
Councilmembers Noel Gallo and Treva Reid said they were focused on saving money for public safety services.
“I understand the request, but at this time I’m going to vote no because I want to be able to spend every nickel and dime when it comes to public safety,” said Gallo.
The annual cost of an ethics investigator is about $232,000, including salary and benefits. The commission’s overall proposed budget for this coming fiscal year is about $2.2 million.
“It just seemed weird”
Kalb told The Oaklandside he was surprised that his colleagues showed so much resistance to the measure.
“It just seemed weird—like they were finding reasons to not put it on the ballot,” Kalb said. Mayor Sheng Thao was at City Hall during the meeting and was prepared to step in and break a tie vote. According to Kalb, Thao’s staff said she would have voted in favor.
Many current and former members of the Oakland City Council are targets of pending investigations by the ethics commission, according to case records obtained by The Oaklandside. But the commission has placed roughly half of its pending cases on hold indefinitely due to the staffing crunch.
Kaplan, who voted against the measure, received a $19,000 fine from the commission in 2022 for failing to disclose her ownership of a condo near a park that she voted to expand.
Gallo, who also voted against it, was criticized in a report released earlier this week by the Alameda County Grand Jury. The report stated that an Oakland councilmember potentially violated conflict-of-interest rules by supporting a billboard advertising contract that benefited their spouse. The Chronicle reported that the councilmember is Gallo, whose wife is a board member of the Oakland Latino Chamber of Commerce, which benefited from the agreement.
Is it a conflict to have lawmakers decide the budget of a watchdog agency that has the power to investigate and penalize them? Maybe, but that’s how it’s done almost everywhere, according to ethics experts.
“In most cities the council is the one that has got to approve the budget, and that budget is just part of their legislative authority,” John Pelissero, a director at the Markkula Center for Applied Ethics at Santa Clara University, told The Oaklandside.
Commission Chair Ryan Micik told The Oaklandside he’s disappointed with the council’s decision. Ethics investigators will continue prioritizing cases involving major violations, but Micik warned that the commission’s caseload has more than doubled in the last 10 years, and there’s no reason to believe that trend will change.
“We’re going to continue to do the best we can to try to make sure the most important of these cases are resolved as quickly as possible, and investigated as thoroughly as possible,” Micik said. “To let Oaklanders know what’s going on, and to be fair to the officials who are the subject of some of these investigations.”
Gail Wallace of the League of Women Voters of Oakland told The Oaklandside she was baffled by the council’s actions in light of the serious ethics cases in Oakland politics that have emerged in recent weeks.
“We’ve had a lot of discussions about whether we can afford to do this,” Wallace said. “I would like to hear the question about whether we can afford not to do this.”
