Romneyizing Los Angeles

Along with a team of my colleagues I’ve shifted to high gear for the last couple of weeks in an effort to prevent the Romneyization of Los Angeles by a company founded by ex-Goldman-Sachs operatives known as “Mount Kellett.” They’ve been emulating Bain Capital’s approach of making money, i.e., stripping companies of their assets and trashing small businesses, putting their employees out of work, effectively forcing families to lose their livelihoods and their homes; all while they laugh all the way to the bank.

In virtually every instance, everybody who’s on the losing end of this equation in the City of Los Angeles is minority and/or an immigrant (primarily Mexicans, Central Americans, Koreans, and Iranians). Mount Kellett is also beginning a potential takeover of Baja Mining (whose 2,500 employees mine copper, cobalt, zinc, manganese in Baja California, Mexico). I’m doing everything I can to not let that happen.

The Writing on the Wall

The proverbial “writing on the wall” was literally “Mene, mene, tekel, u-pharsin,” which means in essence, ‘it has been counted and counted and found wanting.” When the Jewish Prophet Daniel demanded that King Belshazzar of Babylon let the Jews go back to their homeland in Israel from which King Nebuchadnezzar had taken them captive, the writing mysteriously appeared on the wall of the palace as Belshazzar scoffed at Daniel’s demand. The next day, King Cyrus the Great of Persia (modern Iran) was at the gates of Babylon to conquer the city and King Belshazzar was dead.

Mount Kellett should take that prophecy to heart. Here are just some of the “hole cards” that we’re holding in our battle to organize the various businesses, their workers, their customers, and the communities that depend on them to fight the Romneyization of their lives:

• Their lawyers didn’t bother to read the fine print in the pre-existing contracts they’re litigating before filing unlawful detainer suits (or alternatively, they did read the fine print and gambled that we wouldn’t catch them in a serious legal problem);

• Somebody kept the proverbial “two sets of books” and probably didn’t bother to tell their lawyers

• While serving a notice demanding that a business get out of its property, a company representative committed a vehicular hit and run felony, hitting an employee who wasn’t even authorized to accept the notice they were trying to serve;

• Section 1940.2 of the California Civil Code was repeatedly violated by using threats and intimidation to interfere with certain business tenants.

That behavior by Mount Kellett and its contractors in Los Angeles has been bad enough: it has been counted and counted and found wanting, Mene, mene, tekel, u-pharsin.

International Business Pirates

Monty Python’s the Crimson Permanent Assurance in the movie The Meaning of Life is a great literary satire which represents the kind of business that Mount Kellett is taking to a global scale. As Wikipedia describes the satire:

The Crimson Permanent Assurance, an introductory film directed by Terry Gilliam. In a satire on cold corporate culture, elderly office clerks rebel against their emotionlessly efficient, yuppie corporate masters at ‘The Permanent Assurance Company’, commandeer their building, and turn it into a pirate ship, raiding financial districts in numerous big cities, before falling off the edge of the world.

Baja Mining Employees

Mount Kellett has started a corporate raid on Baja Mining. Baja Mining’s corporate responsibility statement may very well have ticked off Mount Kellett, given its utter lack of transparency. Baja sets out its corporate commitment very openly on its website:

Here is what Baja Mining has to say about Mount Kellett’s corporate ethics: http://finance.yahoo.com/news/baja-mining-alerts-shareholders-mount-140000283.html

By contrast, Dun & Bradstreet gives its “NQ” rating to Mount Kellett Capital LLC, DUNS: 96-334-1826 (for a multi-million dollar investment firm its non-transparency doesn’t even enable it to have a D&B Paydex rating) in large part because, as D&B asserts in it’s standard Business Information Report about Mount Kellett:

Repeated attempts to contact the principals to confirm active operations of this business were unsuccessful. The previously listed telephone number reaches a fast busy line, and directory assistance has no new listing. Extent of operations, if any, is undetermined.

Human Consequences of Pirates’ Plunder

What Mount Kellett views as standard operating procedure is seen as socially irresponsible corporate behavior by others. Mount Kellett’s pattern, as demonstrated by its takeover of Meruelo Maddux Properties and its current attempt to gain a foothold on the board of Baja Mining (presumably, to launch an eventual hostile takeover), is to accuse existing management of mis-management, either to a bankruptcy court or to stockholders, present a seemingly reasonable management plan, takeover, and then ruthlessly decimate the stakeholders in a company regardless of past promises made to them by the former owners. In some cases, those promises and corporate relationships span decades. The understandings and promises of Meruelo Maddux (now renamed by its Mount Kellett controllers as “EVOQ;” see http://labusinessjournal.com/news/2012/mar/06/meruelo-maddux-changes-name-evoq-properties/) to small companies it did business with led to hundreds of jobs being created, taxes paid to support government services, and families being able to build a foundation for a better life for their children.

In downtown Los Angeles alone, at least three (3) small businesses are on the chopping block at the hands of EVOQ/Mount Kellett:

• Aztlan Cold Storage (http://aztlancoldstorage.com/), one of the very few cold storage companies that is not part of a huge corporate conglomerate (and whose facilities are coveted by multi-national giants like Castle & Cooke and Great Wall Seafood). The loss of Aztlan Cold Storage will not only destroy existing jobs, it will accelerate the oligopolization of the cold storage industry in California. As Aztlan Cold Storage explains on its website:
  

Aztlan Cold Storage, Inc. was established to fulfill a growing need of refrigerated warehousing services to small and medium size import, export, retail seafood suppliers, brokers and companies. A service that was in demand but was being out right ignored by Los Angeles major and established 3PL cold storage corporations, for the mere reason that they were too small or of no significant inventory volume that would be of interest or meet profit quotas.

• Jay Restaurant where about 60 employees have already lost their jobs at its downtown Los Angeles hot spot

• S.C. Prestige Parking, which has been repeatedly targeted by the large downtown and national parking chains and certain politicians that regularly receive lots of campaign cash from their competitors

Mount Kellett, through its subsidiaries and contractors have launched vigorous drives to throw all of these and probably other businesses out of their facilities. As far as they are concerned, any previous promises to them by Meruelo Maddux’s former owners are of no consequence and were extinguished in bankruptcy court as easily as a fire hose can put out a barbecue. Long term business relationships are not an asset that EVOQ and Mount Kellett even seem to understand.

What You Can DO

The California League of Latin American Citizens has kicked off a Sindicato de Comercios y Empleados de Los Angeles to combat Mount Kellett. Stay tuned to this blog to find out what you can do to help save jobs and lives in Los Angeles. In the meantime, write to Mount Kellett and let its owners know that you don’t appreciate their behavior:

Mount Kellett 623 Fifth Avenue, 18th Floor New York, NY 10022

Anybody up for an “Occupy” action?