Category Archives: Valero Services Inc.

Benicia City Council, Big Oil, Negative campaigning, Nielsen Merksamer, Valero Benicia Refinery, Valero Services Inc.

SF Chron: Attorney associated with Valero-funded PAC connected to ‘faux-ilition’ scheme targeting oil refinery regulations and penalties

[Note from BenIndy Contributor Nathalie Christian: An attorney associated with the firm a Valero-funded PAC has used throughout allegedly misleading campaign efforts in Benicia elections has been exposed as a key figure behind a ‘phony coalition’ some say was manufactured to oppose refinery regulations and penalties. Watchdog and advocacy organizations describe the coalition – dubbed a ‘faux-ilition’ by Calpeek – as a Big Oil–funded scheme to make industry opposition to a proposal to cap oil company profits appear grassroots-driven. (Industry leaders deny the allegation.) Benicians may recognize the name of the firm – Nielsen Merksamer – as well as the name of the attorney in question from Roger Straw’s reporting on the Valero-funded PAC’s efforts to influence local elections. (This PAC was previously known as ‘Working Families’ and more recently as ‘Progress for Benicia.’) Nielsen Merksamer was also behind a letter threatening litigation over a Benicia Open Government Commission’s candidate forum in 2018. Nielsen Merksamer’s clients include Valero Energy Corporation of course, as well as other Big Oil giants BP, Chevron, ConocoPhillips and Exxon.]

How a network of ‘phony’ groups sprung up to fight Newsom’s oil regulations

San Francisco Chronicle, by Dustin Gardiner, June 19, 2023 (Updated June 20)

Groups with names like Californians Against Higher Taxes sprung up to oppose Gov. Gavin Newsom’s plan to penalize oil companies. Advocates say one man is behind three of them.

California lawmakers were on the verge of passing Gov. Gavin Newsom’s proposal to allow the state to cap the profits of oil companies when a trio of advocacy groups with innocuous-sounding names went on an advertising blitz.

The groups — nonprofits that call themselves Californians Against Higher Taxes, Californians for Affordable and Reliable Energy and Californians for Energy Independence — campaigned against Newsom’s measure in a blizzard of social media posts and television ads. The groups said that further regulation of oil refineries would make the state more dependent on foreign crude oil imports or would raise the cost of gas for consumers, dubbing the proposal “Gavin’s gas tax.”

Those groups also billed themselves as coalitions of thousands of concerned taxpayers or small-business owners. Their ads and websites are rife with stock images of everyday-looking people.

But the organizations, according to corporate and lobbyist filings, weren’t created by average Californians or small businesses. One attorney from the North Bay, who has a long history of working with oil companies and trade associations, was central in organizing all three groups.

Steven Lucas, a San Rafael attorney who specializes in political law, is listed as the CFO and secretary for two of the groups, Californians for Affordable and Reliable Energy and Californians for Energy Independence. He also held the same roles with Californians Against Higher Taxes until last year.

Lucas did not respond to emails and voicemails requesting comment. The groups he operated were heavily funded by oil refineries and the Western States Petroleum Association, an industry trade group.

Environmentalists and consumer advocates said the advertising campaign is an example of how the oil industry used “astroturf” or “front” groups to try to kill Newsom’s proposal using misleading tactics.

It’s designed to create the perception that there’s a grassroots movement that’s against oil industry accountability. These are not real groups; these are phony groups created for the purpose of preventing the oil industry from facing accountability for its high prices and environmental crimes.” Jamie Court, president of Consumer Watchdog

“It’s designed to create the perception that there’s a grassroots movement that’s against oil industry accountability,” said Jamie Court, president of Consumer Watchdog, an advocacy group that pushed to cap soaring gas profits. “These are not real groups; these are phony groups created for the purpose of preventing the oil industry from facing accountability for its high prices and environmental crimes.”

Lawmakers ultimately passed Newsom’s proposal, though it was significantly scaled back after he got a lukewarm response from some moderate Democrats amid the oil industry’s ad push.

The bill Newsom signed into law gives state energy regulators the authority to place a cap on oil refiners’ profits in California — and to set the amount. They also now have the authority to fine companies that exceed the cap and require them to disclose information about their operations and prices.

The Democratic governor’s original proposal would have gone further by requiring legislators to set the amount of the profit cap. Still, the bill that passed was a major victory for environmentalists and consumer advocates who had failed, for decades, to pass measures designed to combat California’s highest-in-the-nation gas prices.

As lawmakers considered Newsom’s measure, the oil industry spent more than $9.4 million in the first quarter of 2023 on lobbying and public-influence campaigning, largely centered on Newsom’s oil profit proposal. About $5.2 million of that money was funneled into the three advocacy groups with ties to Lucas.

Combined, the oil-industry affiliated groups have run 568 social media ads on Facebook and Instagram since December, according to data from parent company Meta.

The ad tsunami started in late 2022, quickly after Newsom called a special session for lawmakers to consider measures to combat skyrocketing gas prices consumers were paying at the pump. He accused the oil refiners of “price gouging” Californians as the price of a gallon of regular gasoline soared to a statewide average of $6.42 last fall.

But opponents of the measure said the accusation that they used “astroturf” or deceptive tactics to stoke a perception of opposition is unfair and negates the concerns of a broad coalition of groups.

They said many business interests, including the California Chamber of Commerce and agricultural companies, also had concerns that Newsom’s approach, including the proposal that lawmakers ultimately adopted and his more aggressive earlier pitch, could have the unintended consequence of driving prices up if it causes oil companies to produce less gas in California.

In addition to Lucas, the three advocacy groups are headed by business association executives. Californians for Energy Independence listed Allan Zaremberg, the former leader of the state Chamber of Commerce who died this year, as its CEO. Californians for Affordable and Reliable Energy lists its CEO as Robert Lapsley, president of the California Business Roundtable, another association of business groups that includes oil companies.

Californians Against Higher Taxes, which was organized by Lucas and the law firm where he works, is now led by Jennifer Barrera, CEO of the Chamber of Commerce; and Thomas Hiltachk, a political attorney. Hiltachk did not respond to a request for comment.

Kevin Slagle, a spokesperson for the Western States Petroleum Association, said the notion that the opposition campaign cloaked its efforts is laughable. He said the groups had to report their spending, and that the effort through third-party groups was combined with ads directly funded and managed by oil companies and WSPA.

“It’s disingenuous to call these efforts fake. They’re very real and they’re based on legitimate policy concerns,” Slagle said. “Our political system has so much transparency built into it.”

Of the two dozen oil companies and trade associations that poured more than $9.4 million into California lobbying and influence campaigns, Chevron contributed more than half of that total. The company, the largest oil refiner in California, spent $4.9 million, including $3.63 million it contributed to Californians for Energy Independence.

Ross Allen, a Chevron spokesperson, defended the company’s lobbying efforts and suggested “attacks” on oil refining in the state are putting the supply at risk. He said California has volatile energy markets, in part, due to its clean-fuel standards that cut off its gas supply from the rest of the country.

“Chevron works hard to educate policymakers and the public about how fragile California’s energy markets really are,” Allen wrote in an email.

But Melissa Aronczyk, an associate professor at Rutgers University in New Jersey who studies the impact of public-relations campaigns on climate change policy, said the playbook that oil companies used by deploying “astroturf” groups in California is hardly new. She said the difference is that environmentalists have become more adept at uncloaking such tactics.

“People have much more awareness about greenwashing than they did ever before,” she said, using a term for marketing that’s intended to mislead the public about environmental impacts.

“[…] the tactic of using outside groups with seemingly innocuous names is designed to trick voters who might be more skeptical of advertising if they could see it’s paid for by oil companies.”

Aronczyk said the tactic of using outside groups with seemingly innocuous names is designed to trick voters who might be more skeptical of advertising if they could see it’s paid for by oil companies. In California, candidates and ballot measure campaigns must disclose their major donors in fine print at the bottom of ads. But that same disclosure requirement doesn’t apply to ads for issue-based campaigns that aren’t tied to an election.

She likened the “puppet campaign” strategy to the marketing tactics employed by other embattled industries, including tobacco companies and prescription drug firms, which bankrolled third-party advocacy groups to fight regulations targeting cigarettes and the proliferation of opioid drugs, respectively.

“They really are running scared, and that’s why they’re resorting to these tactics,” Aronczyk said. “It is a very short playbook, and it has been used for many decades.”

Indeed, Lucas, the attorney behind oil-industry-funded advocacy groups, is a partner at a law firm, Nielsen Merksamer, which also has a long history of working with tobacco companies to fight restrictions in California.

In 2017, two other attorneys from the firm were the treasurers of an advocacy group dubbed “Let’s Be Real” that worked with the tobacco industry in an unsuccessful attempt to overturn San Francisco’s law banning the sale of flavored tobacco and vaping products. Similarly, the firm played a major role in coordinating a failed referendum to repeal a 2020 statewide law that banned most flavored tobacco products.

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Benicia City Council, Benicia elections, Benicia Mayor Steve Young, Big Oil, Corporate influence, Local elections, Valero PAC, Valero Services Inc.

Benicia’s mayor calls out Valero’s big war chest ahead of election

The Vallejo Sun, By John Glidden, Feb 15, 2022

The Valero Benicia refinery

BENICIA – Mayor Steve Young says he’s displeased that Valero Benicia Refinery is poised once again to spend a large sum of money during the upcoming city council election.

The refinery dumped $200,000 into its Working Families for a Strong Benicia PAC last December, giving the PAC more than $232,000 ahead of the November 2022 election, according to campaign forms submitted to the Benicia City Clerk’s Office.

Benicia Mayor Steve Young.
Benicia Mayor Steve Young

Typically, a Benicia council candidate can expect to receive more than $20,000 in contributions over the span of an election or about 10% of what Valero has available.

The move has revitalized conversation in town between environmentalists seeking more regulations, the company, and local unions that are concerned that city officials want to shut down the plant.

Valero couldn’t be immediately reached for comment.

Young — who said he issued his statement over the weekend only as a Benicia resident and not as mayor — admitted that what Valero was doing was legal but argued “it is wrong-and extremely harmful to our community.”

“There is only one purpose in making such a huge expenditure nine months before the election: to scare off any potential City Council candidate who would consider running without first getting Valero’s stamp of approval,” Young’s statement read. “What candidate is willing to go up against that kind of war chest?”

Valero opened its PAC ahead of the 2018 city council elections, ultimately backing Lionel Largaespada and Christina Strawbridge. Both were elected. The PAC publicly opposed Benicia Planning Commissioner Kari Birdseye. Two years later, the PAC once again backed Strawbridge, this time as she made a mayoral bid, while opposing Young. Despite the PAC spending $250,000 during that election, Young was elected.

Young and Birdseye served on the planning commission together when the body rejected the company’s crude-by-rail proposal in early 2016. The Benicia City Council went on to reject the project later that year.

Young wrote that Valero should have a say in the election but “they should also play by the same rules that apply to everyone else under our campaign finance regulations.”

Young said the city’s campaign laws allow a candidate to spend no more than $35,000 on a campaign. He argued Valero should be held to the same rule.

“But Valero’s size and wealth gives them the belief that they can pick and choose who should be our elected representatives,” Young added.

Young said that to stop Valero every council candidate should reject support it receives from the company.

“In addition, voters should demand that any candidate take a public and ongoing stand that Valero should not support their campaign in any way,” Young added. “I call on all prospective candidates in the November election to make this pledge. If no candidate is willing to be supported by this PAC, where will they spend all of their money?”

Young’s statement comes as the Valero refinery has been receiving some negative attention.

The Bay Area Air Quality Management District announced in January that it was seeking a legally binding order against the refinery to correct “significant excess emissions violations.” The district alleges that Valero didn’t report that more than 8,000 tons of excess emissions came from the plant over a 16-year period.

Last November, a contractor was found dead hanging from a scaffolding ladder by his safety harness over a piece of refinery equipment.

Valero is the largest employer in Benicia, employing more than 400 people. The plant processed 165,000 barrels of oil each day, according to its website.

Campaign records show that from July 1 through Dec. 31, 2021, the PAC spent more than $5,000 with Sacramento-based Nielsen Merksamer Parrinello Gross & Leonli LLP for campaign services.

Young, who has opened a 2024 re-election campaign, reported raising no contributions and only spending $29 during the second half of 2021. The campaign reported having about $900.

Meanwhile, both Largaespada and Strawbridge, who are up for re-election this November, reported no activity during the same period.

Benicia City Council, Benicia elections, Corporate influence, Local elections, Steve Young, Valero PAC, Valero Services Inc.

Here We Go Again – Benicia candidates and voters must reject Valero’s big money

Here We Go Again

On social media, by Steve Young, Benicia

Steve Young, Benicia resident (and Mayor)

I want to emphasize that I am writing today not as the Mayor, but rather an interested Benicia resident and voter. I also want to state that I understand the importance of Valero to our local economy as a major employer and taxpayer and an important contributor to local causes. Since the last election, I have initiated meetings with the Valero General Manager on a monthly basis, and feel that we have developed a respectful relationship. I have also told him directly that I will be writing this article.

Last week, it was revealed [here on the Benicia Independent] that Valero, through the oddly named Working Families for a Strong Benicia Political Action Committee (PAC), had deposited another $200,000 in anticipation of this year’s City Council elections. They are currently sitting on $235,000.

There is only one purpose in making such a huge expenditure nine months before the election: to scare off any potential City Council candidate who would consider running without first getting Valero’s stamp of approval. What candidate is willing to go up against that kind of war chest?

In 2018, Valero and their construction trade union allies, ran a big-dollar, negative campaign against Planning Commission Chair Kari Birdseye (“Birdseye Bad for Benicia”) and in favor of Christina Strawbridge and Lionel Largaespada. The PAC attack was successful, and Strawbridge and Largaespada were elected. The presumed reason for opposing Ms. Birdseye is that she (and I) had led the Planning Commission denial of Valero’s Crude by Rail proposal (a denial that ultimately was upheld by the City Council).

In 2020, the same Valero-funded PAC decided to run the same type of negative campaign against me in my race for Mayor. Over $250,000 was spent attacking me, and in favor of Ms. Strawbridge. Unlike in 2018, however, Benicia voters saw through this effort and I was elected by a 20 point margin.

The argument has been made that, as Benicia’s largest employer and a significant taxpayer, Valero should have a say in the selection of Council candidates and the Mayor. And I agree. They should have the same right as any other company or individual to support the candidate(s) of their choice.

But they should also play by the same rules that apply to everyone else under Benicia’s campaign finance regulations. They, and any of their employees, are able to donate $540 to the candidate of their choice. But, in Benicia, candidates are limited by our campaign finance ordinance to spending no more than $35,000 on a campaign (assuming they can raise that much). By contrast, the PAC spending more than $250,000 on our local campaigns shows how uneven (and undemocratic) their influence buying campaign has become.

[Editor – see Benicia Municipal Code…
– Chapter 1.36: Voluntary Code of Fair Campaign Practices
– Chapter 1.40:  Disclosure Of Contributions and Expenditures
– Chapter 1.42: Contribution and Voluntary Spending Limits]

The disastrous “Citizens United” Supreme Court decision opened the door for this by declaring that “money is speech”, and allowing for unlimited spending by corporations and unions. Usually, this level of over the top spending is confined to national and statewide elections, not in small towns like Benicia. But Valero’s size and wealth gives them the belief that they can pick and choose who should be our elected representatives.

What they are doing is legal, but it is wrong-and extremely harmful to our community. This is what is truly “Bad for Benicia”.

The only way to stop it is if EVERY candidate for City Council publicly, vociferously, and repeatedly rejects support from the Valero PAC, and denounces this type of negative campaigning and excessive spending. In addition, voters should demand that any candidate take a public and ongoing stand that Valero should not support their campaign in any way. I call on all prospective candidates in the November election to make this pledge. If no candidate is willing to be supported by this PAC, where will they spend all of their money?

Leave Benicia elections to Benicia voters.

Benicia City Council, Benicia elections, Corporate influence, Local elections, Valero PAC, Valero Services Inc.

Valero sitting on $232,000 in readiness to influence 2022 Benicia elections

Valero Political Action Committee files financial statement with City of Benicia on Jan 31, 2022

Source: City of Benicia website, 2022 Campaign Finance Reports
Document: “Working Families…” CA Form 460, covering 7/1/2021 – 12/31/2021
Summary:

FULL COMMITTEE NAME: Working Families for a Strong Benicia, a Coalition of Labor and Industrial Services Companies, Committee Major Funding by Top Contributors Valero and International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers Local 549 PAC

Total Contributions:

This period: $200,000
Year Total to Date: $200,000
Detail: Received $200,000 on 12/23/21 from Valero Services, Inc. and Affiliated Entities, 3400 East Second St., Benicia [See CA Secty of State listing for Valero Services Inc & Affiliated Entities.  See also Valero Services’ year-end report showing this contribution.]

Total Expenditures:

This period: $6,366.34
Year Total to Date: $13,373.39
Detail: 6 payments to Nielsen Merksamer Parrinello Gross & Leoni, all for Professional Services (legal, accounting)

Current Cash Statement: $232,386.88

Outstanding Debts: $1,651.63

Detail: 2 expenses accrued but unpaid to Nielsen Merksamer etc. for Professional Services (legal, accounting)