Race and Gas: A Multi-Millionaire Gas Magnate Says His Empire is Part of the Civil Rights Struggle. Is It?
In a year full of reporting on politician’s alleged misdeeds, some black councilmembers feel that their behavior has drawn more attention and scrutiny than that of their white colleagues. The rhetoric makes white councilmembers nervous: When Councilmembers David Catania, Mary Cheh, and Tommy Wells (all of whom are white) called this summer for the resignation of Ward 5 Councilmember Harry Thomas Jr. (who is black) you could practically hear their staffers praying that an African-American official would issue the same demand. But so far—though Thomas agreed to pay back $300,000 to the city after the attorney general alleged he stole city funds and used it buy a luxury SUV, golf trips, and a meal at Hooters—no prominent black politician has called for his resignation.
So what better time to needlessly inject race into an otherwise wonky debate over how the city’s gas-station regulations work?
That’s what some councilmembers and staffers say is being done by gas magnate Eyob “Joe” Mamo, an Ethiopian immigrant who has over the past decade has become the biggest player in the city’s gas scene and a major force in local politics.
Mamo, whose Capitol Petroleum Group is a gas wholesaler, also owns nearly half of the city’s gas stations. As a result, he’s the subject of an antitrust investigation by D.C.’s attorney general—and is repeatedly invoked as a modern-day John D. Rockefeller by the sponsors of a bill that would force wholesalers to divorce themselves from operating gas stations.
The legislation is being pushed by Ward 3 Councilmember Cheh, who four years ago led an effort to repeal the same provision. Cheh says she’s trying to fix a mistake she made.
According to a council committee report, representatives from the Federal Trade Commission assured the District in 2007 that not having this so-called “divorcement provision” would mean lower gas prices. And the D.C. attorney general’s office said it wouldn’t lead to “further market concentration.” As it turned out, D.C.’s gas prices went from being competitive with neighboring jurisdictions to being some of the most expensive in the nation. Mamo and another wholesaler control about 70 percent of the market.
Mamo argues that the rise in District gas prices is due to a few Exxon retailers who are price gouging. But supporters of Cheh’s measure—who include two former FTC lawyers and the current attorney general, Irv Nathan—say that having so much control concentrated in one single company (Mamo’s) has even more to do with it.
Mamo also says he’s being unfairly scapegoated because of high gas prices he doesn’t control. He says Cheh is working on behalf of a few wealthy gas station owners and that her bill will hurt contractors he employs.
He’s hired plenty of people to help him make those arguments. The team assembled to block Cheh’s bill includes the blue-chip lobbying firm Holland & Knight as well as former city councilmember and mayoral candidate John Ray, Mamo’s longtime point man on legislative matters. The American Petroleum Institute, a trade group, has also been lobbying against the bill, though independent lobbyist Ellen Valentino-Benitez says the institute’s efforts aren’t related to Mamo’s.
Lobbyist disclosure forms from July—the most recent ones available—do not indicate just what Mamo is paying his hired guns. Neither Mamo nor Ray returned calls seeking comment. And a Holland & Knight partner, Chip Glasgow, declined to say how much his firm was billing Mamo. Council staffers predicted that the total tally for Mamo’s current lobbying push to be quite hefty. (OCF records also don’t show how much a group of gas station retailers who support the bill are paying Maryland-based lobbyist Bruce Bereano, who is Mayor Vince Gray’s fraternity brother. Bereano likewise declined to comment.)
Beyond hiring lobbyists, Mamo also has a long record of helping specific politicians. His various companies have already put $4,000 toward the four couniclmembers up for re-election next year.
But Mamo isn’t just confining himself to local power brokers. The Rev. Jesse Jackson and the Congressional Black Caucus have also spoken out against the bill.
And that’s where the whole racial aspect of this fight has come to life. As it happens, Cheh’s measure was co-introduced by Wells, Ward 2 Councilmember Jack Evans, and At-Large Councilmember Phil Mendelson, all of whom are white. Catania is the bill’s lone co-sponsor.
When Cheh proposed similar legislation last year, Jackson made calls to councilmembers and sent a letter to Gray, then the council’s chairman, asking him to oppose it. “The measure would be a dagger in the heart of the civil rights progress that has been made,” Jackson wrote in the missive, which was CC’d to all 13 councilmembers. “The District should encourage, not curtail, the advancement of civil rights inclusion in the petroleum industry.”
This year, Jackson wrote a similar letter to Council Chairman Kwame “Fully Loaded” Brown. But this year’s letter was CC’d only to the seven black councilmembers and the mayor. And it accused the bill’s sponsors of being “intent on denying equal opportunity to minority businesses in the District.”
Jackson and Mamo have a history. Mamo and his family members have given $30,000 to Jackson’s political action committee, “Keep Hope Alive,” federal election records show. Jackson advocated on Mamo’s behalf during an epic multi-year showdown with ExxonMobil. In a previous interview with Washington City Paper, Mamo said there’s been no quid pro quo in the relationship, and that Mamo gladly answers fundraising calls from civil rights groups: “To me, it’s my obligation to contribute to African-American organizations,” Mamo said.
A Jackson representative did not return a phone call seeking comment.
Similarly, the Congressional Black Caucus’s executive director and general counsel sent numerous council staffers a letter signed by CBC chairman Rep. Emanuel Cleaver II (D-Mo.) and Rep. Yvette Clarke, (D-N.Y.) the caucus’ secretary.
“We also believe the gains made through the hard work of the civil rights groups and others should not be wiped out by such legislation,” the letter says. “Moreover, we do not believe that such legislation should force a company like Capital Petroleum Group to change its organization structure and create uncertainty for a fairly new minority company and to force it to terminate contracts with many small minority businessmen and businesswomen.”
There was only one problem with the letter: The CBC never approved it. Del. Eleanor Holmes Norton, the District’s lone non-voting member in Congress, says she’s a regular at CBC meetings and Mamo’s letter never came up. Several council sources describe Norton, whose whole political career is premised on trying to keep Congress from interfering in local affairs, as livid about the letter.
“You better believe it,” Norton told LL. “The caucus would never do that. They are the ones who protect Home Rule.”
Federal campaign records show that Mamo and his family members have donated to several CBC members, including Rep. Charlie Rangel (D-N.Y.) and Rep. Sheila Jackson Lee (D-Texas).
Norton says she managed to get Cleaver to write a brief follow up letter withdrawing the first letter (it was mistakenly spent due to a “staffing error,” according to the note). But some council staffers who received the first letter did not receive the second one. A spokeswoman for the CBC who promised LL details on said “staffing error” did not ultimately respond.
That weak sauce “staffing error” explanation has led many in the Wilson Building to speculate that either Jackson or Ray somehow exerted their influence to get the CBC involved.
Whatever the case, Mendelson says the CBC’s letter and its quiet withdrawal show the lengths Mamo and Ray are willing to go to defeat his legislation. “This really is becoming a textbook example of monied interests pushing all the buttons to keep a monopoly.”
“It’s completely inappropriate,” Mendelson adds. “What? African-Americans should have to pay higher prices because a minority-owned company has a monopoly. And minority businessmen who operate gas stations should be driven out of business for one minority businessman?”
Cheh says she worries that support for what she thinks should have been a basic consumer-fairness measure is slipping as more lobbying money is brought to bear. “I’m deeply concerned that money is being contributed that may have an influence on the vote of councilmembers,” she says.
Photograph by Darrow Montgomery