How Oakland's fearful politicos enabled waste: Part III

Political, racial pressure pays off for the bakery
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In 1996, Your Black Muslim Bakery lieutenant Nedir Bey had a wealth of ammunition with which to lobby city leaders for a $1.1 million loan to fund his health care company, E.M. Health Services.

The previous year, the city of Oakland had agreed to spend hundreds of millions of dollars to bring the Oakland Raiders back from Los Angeles, a deal that quickly soured and has cost the city and Alameda County taxpayers more than $20 million a year ever since.

The developers of a new downtown ice rink had defaulted on $11 million in bonds just three months after the facility opened.

The city had also given plenty of money to other businesses, most white-owned. As a result, the City Council was getting a relentless drubbing from bakery members and black business associates who lined up at meetings to speak on behalf of E.M. Health Services and its efforts to obtain the loan.

They argued that white business owners had an easier time obtaining credit, unsecured loans and support from the city while black-owned businesses endured undue scrutiny. Elected officials endured hints and outright accusations of racism if they dared ask questions about the company or collateral for the loan.

Some of those accusations occurred during the June 4, 1996, council meeting where the officials discussed giving E.M. Health an interim start up loan of $275,000 in city funds. The loan was needed because the company's application for a $1.1 million share of federal Housing and Urban Development funds for job training programs had not yet been distributed to the city of Oakland.

During the meeting, Shannon Reeves, then-president of the NAACP Oakland chapter, accused the city's black elected officials of forgetting where they came from.

"It's time to deliver for the people in the community...,'' Reeves said. "We need those who look like us to advocate for us.''

Beth Aaron, executive director of the Bay Area Black Contractors Association also testified at the meeting that night. She said the record proved that white-owned businesses had a much easier time getting Oakland to open its purse strings.

"Those who are white or friends of friends get things done very quickly,'' she charged. "Those of us who are of color... do not.''

Even Nedir Bey got into the act.

"A few years ago we wouldn't have been able to come here and ask for anything without getting run out,'' he said. "Cut us a check on Friday for $275,000. Compare us to other projects that you have passed.''

A decade later, E.M. Health is just an unpaid debt on the city's books, its license suspended by the California Franchise Tax Board. Principal payments first due in May 1998 never materialized, and by the time city staff knocked on its doors in October 1999, the offices had been cleared out.

But the story of how the business, a subsidiary of the now-bankrupt Your Black Muslim Bakery, received the money despite a flawed business plan and a disturbing criminal incident in Nedir Bey's past illustrates the extent politics and pressure played in officials' decision to approve the loan.

Bakery members have also been linked to several violent incidents, including the shooting death of journalist Chauncey Bailey, as well as alleged real estate and welfare fraud and child rape. 'Intimidation factor'

"In reality it was political pressure that got them the loans,'' said now-City Council President Ignacio De La Fuente, who was a councilmember at the time. "Deep down inside everybody knew it was bull---. No business plan, no records anyone could show. ... And they kept saying they were failing because they didn't get the city's money soon enough.''

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