The full Board of Supervisors will vote Tuesday on File No. 050435, “Resolution rejecting the Mayor’s offer of a conditional waiver to San Francisco Cycling LLC for the cost of police services.”
In yet another Republican-style governance act, Mayor Newsom prefers to remove funding from needed services for the city’s most vulnerable and give almost $250,000 from this year’s budget to Thomas Weisel, one of the Bay Area’s richest Republicans, in the form of a fee waiver for the San Francisco Grand Prix bike race, also known as the T-Mobile Grand Prix.
But it doesn’t stop with just a one-year waiver: Newsom’s ill-conceived plan would cover four years and deny the supervisors the authority to consider ensuing waivers in future budgets. The total cost to needed city services would likely top more than $1-million.
Leading the fight to stop this act of corporate welfare at the expense of the poor is District 6 Supervisor Chris Daly, Defender of the Disenfranchised.
Obviously, the amount of money we’re talking about is spare change to the city’s $5-billion budget.
There is no doubt that the city will benefit from the San Francisco Grand Prix. In it’s partially flawed study “Economic Impact of the 2004 T-Mobile International Cycling Race” prepared for the San Francisco Convention and Visitors Bureau (the full report is available in Adobe Acrobat format at Chris’ webpage), Economics Research Associates points out that the city will probably earn close to half a million dollars in tax revenue from the race.
And there is no doubt that the promotion of bicycling will also produce inestimable positive benefits for the city.
But what we’re talking about is principle. What we’re talking about is a small piece of a much larger puzzle. So let’s consider a few more pieces of that puzzle to place Newsom’s act in perspective.
The Color of Money: Tainted Red
Sup. Daly pointed out that Weisel has contributed heavily to the Republican party which is absolutely true. There’s the $50,000 to the California Republican Party and the soft money $250,000 to the Republican National Committee as well as several smaller contributions to specific Republican candidates. But Chris missed the money donated by Weisel’s employees/partners. All told, Weisel’s financial influence statewide and nationally tops $441,000 to Republicans.
Locally, Weisel alone has contributed almost $13,000 to right-wing causes including Plan C and the Committee on Jobs, two Warren Hellman-sponsored fronts that have wreaked havoc with filthy lies and subterfuge on progressive politics and politicians.
Hellman’s money, you’ll remember, is behind the attempt to turn Golden Gate Park into a playground for the rich by widening the Martin Luther King, Jr. roadbed, against the protests of progressive groups like the Sierra Club and Transportation for a Livable City, among others.
But allow me to digress more. The same right-wing extremists financed Sup. Elsbernd’s attack on Chris Daly during last year’s election. See Casey Mills’ 10/26/2004 Beyond Chron article “Gavin’s Golden Boy Takes Cheap Shot in D7”. Weisel’s contribution? $1,250 to Elsbernd’s campaign, and a matching amount to Sup. Alioto-Pier’s bid for her seat.
Now let’s tie the two supervisors where their lips lie: to the backside of Weisel’s friend, Gavin Newsom, who has received $3,600 in contributions from Weisel and/or his employees/partners.
Is the picture becoming more clear?
Weisel’s Stock Fraud
In a story missed by four respected newspapers – the New York Times, Washington Post, Los Angeles Times, and the Sacramento Bee – the northern Pennsylvania TimesLeader reported last Thursday on the fraudulent stock transactions committed by Thomas Weisel Partners and the resulting $1.75-million settlement agreed to by Thomas Weisel.
Weisel’s payment comprises a $450,000 fine and $1.3-million in repayments to swindled investors.
From November 1999 through July 2002, Weisel overcharged investors through initial public offerings (IPOs) from Hotjobs.com Ltd., InfoSpace, Inc., Level 3 Communications, Inc., and Sprint FON Group charging commissions as much as $1 per share for stocks normally commanding no more than 6 cents per share for commissions. Weisel also violated e-mail retention practices that demand e-mails be kept as long as three years.
In one transaction day alone, Weisel collected $1.2-million just from three customers who conducted nine transactions. Weisel was only entitled to commissions of a little over $122,000.
The Security Fraud Recovery Center documented that Weisel’s distribution fund was set at $5-million, which indicates that Weisel gets to keep $3.25-million of his ill-gotten gain.
Managing Red Money
Weisel’s website paints revenues galore for his merchant bank Thomas Weisel Partners LLC for 2003 and 2004: $254-million and $270-million, respectively. Investment banking activity alone saw a 48% increase, totaling $13-billion in transaction value. Additionally, his other ventures – Tailwind Capital Partners LLC, Thomas Weisel Venture Partners L.P., Thomas Weisel Healthcare Venture Partners L.P., Thomas Weisel Global Growth Partners L.P., and Thomas Weisel Distribution Management – exhibit management of nearly $11-billion of the country’s top 1% of the population.
Remember George Bush’s $87-billion tax cut for the rich? Or the $220-billion corporate tax cut?
Enter Dave Chauner, head of Threshold Sports LLC and co-owner of the Grand Prix. As reported in the Bee, Chauner claims he’s been losing money on the event and that he has “never asked Tom Weisel for a penny for this bike race.”
Well whose fault is that?
Instead of accepting the responsibility for his own mismanagement, Chauner alludes that it’s Chris Daly’s fault because Sup. Daly refuses to grant the corporate welfare demand.
And if Chauner doesn’t have the courage to ask Weisel for the money for the race, that’s his problem.
As to the implied threats to move the race from San Francisco, the city can replace the Grand Prix with another event. But the organizers of the event can’t replace San Francisco: the combination of unique topography and climate can’t be duplicated in Los Angeles, Seattle, Portland, or any other West Coast or East Coast city.
It is not the responsibility of the city to assume the liabilities of a business venture; that responsibility rests with the owners of the event: the owners can deduct the cost of doing business from their corporate income tax.
The full Board has only one logical and practical course of action and that’s to refuse the demand for corporate welfare. The Resolution rejecting Newsom’s demand to pay Weisel’s/Chauner’s business costs deserves a YES vote.
(Note: Supervisor Daly holds a press event on the proposed corporate giveaway at 4:00 today at City Hall)