From eastbayexpress.com
Originally published by East Bay Express October 24, 2001 (c)2001 New Times, Inc. All rights reserved.

The White Shadow
Darrel Reese is not about to let the label "convicted felon" kill his colorful, if unofficial, career as Richmond's political boss and power broker.
By Will Harper

During bull sessions with leaders of Richmond's police and firefighters' unions earlier this year, Darrell Reese would roll up his pant leg and brandish the electronic monitoring device wrapped around his ankle as though it were a fashion accessory he'd just bought at Nordstrom. "It was a big joke with me and the police officers," Reese chuckles. "I told them, 'Not only does this thing monitor me, it's also taping our conversations and taking pictures of you.'" A retired Richmond fire captain, Reese was among friends who didn't mind that in the eyes of federal prosecutors and his political enemies, their pal was a convicted felon. As he had done so many times in the past, Reese, a former union president, was just giving his friends a few strategic pointers as they negotiated with City Hall over a new retirement benefits package. In spite of his undesirable fashion accessory, Reese couldn't resist the temptation to remain a political player in Richmond.

On February 2, US District Court Judge Lowell Jensen ordered Reese to wear the monitoring device for four months as punishment for not reporting to the IRS $40,000 he made from his lobbying and consulting business during 1996 and 1997. Jensen also sentenced Reese to three years' probation. After the sentencing hearing, Reese and his wife, Doris (whom he met while teaching a driver's ed course in San Francisco), quietly exited the Oakland Federal Building. Doris clutched the long left arm of her husband's lanky six-foot-two frame, while Reese tucked his right hand into the pocket of his suit. His bushy eyebrows topped rectangular eyeglasses. His hair was combed forward to hide his receding hairline, but unlike most comb overs, the 64-year-old Reese's indulgence to vanity managed to look smooth instead of desperate.

"I'm going to be involved in campaigns," he told the West County Times in his low-key Oklahoma drawl following the sentencing hearing. "I'm going to be doing other activities that are legal, obviously." It was a bold statement from a man who had been at the center of a multiyear FBI corruption investigation. Federal agents had tailed Reese for months, hoping to prove that Reese had made illegal payoffs to local politicians in exchange for the approval of city contracts. They tapped his phone, scoured city contracts and voting records going back to 1992, and called dozens of witnesses to testify before a grand jury. But all of this effort failed to produce a single corruption indictment. The feds could only come up with a turgid tax-evasion charge.

For his part, Reese was not going to let the "convicted felon" label kill his unofficial career as Richmond's political boss. He had come too far to quit now. He'd begun his adult life as a lowly farm laborer chopping cotton in the Central Valley, later joining the Richmond fire department and eventually becoming the refinery town's top power broker. A white Republican living in the suburban town of Rodeo, Reese has been called an unlikely candidate for kingmaker in this blue-collar industrial city largely populated by African Americans and liberal Democrats. In Richmond politics, however, money has always talked, and with the financial resources of the International Association of Firefighters Local 188, Reese had plenty to say. Using the local's cash, Reese got union-friendly candidates elected to the City Council and funded often vicious campaign hit pieces to knock off incumbents he didn't like. As his influence on the City Council became increasingly visible, Reese branched out and began moonlighting as a lobbyist, asking people he'd helped get elected to back his developer clients. His critics complained about Reese running his lobbying business from the El Sobrante fire station. One such critic paid with his City Council seat thanks to Reese-crafted hit pieces.

But the FBI investigation did succeed in one respect, Reese says. It changed the outcome of the 1999 City Council election so that only one of four candidates he backed -- Vice Mayor Nat Bates -- celebrated victory at the end of the night. Everyone else suffered from what Reese insists was an FBI smear. "Eighteen days before the election there were close to one hundred FBI and Internal Revenue agents that hit the city of Richmond," he says. "The FBI had been taping all of the strategy of my side of the campaign for months in advance. You think Watergate was a fucking travesty? This was a massive governmental intervention into the electoral process. Was it political? How could it be otherwise? What was the compelling public interest that demanded that this raid hit just before the election?" Reese won't say exactly which of his enemies he thinks triggered the FBI raid, but there's no doubt in his mind that powerful people were out to get him that year.

Now, two years later, another city election season is upon us and Darrell Reese is back, pushing a slate of candidates for City Council as well as backing his old pal Nat Bates in his bid for mayor. For most voters, next month's municipal election will be about deciding the future of the city in which they live. But for Darrell Reese, the election will also determine his future in the city people say he once owned.

Optimistic Richmond political veterans like to compare their hometown to the fabled Scottish village of Brigadoon, where every one hundred years the omnipresent fog lifts for a day to reveal an idyllic paradise. Unfortunately, in Richmond's 96-year history the fog has arguably never lifted. The city has never been able to shake its image as the "armpit of the Bay Area" (as the mayor of neighboring El Cerrito once put it). The stench in the air hasn't just come from the Chevron refinery. The distinct odor of scandal and corruption has always been as stubborn a part of Richmond's social landscape as crime and poverty.

In 1999, to cite one example, the Contra Costa County grand jury issued a report describing gross mismanagement in the city's recreation department going back 25 years. According to a news account filed at the time, the grand jury report documented "employees failing to show up for work or leaving early, misusing travel funds, tampering with personnel files, ignoring work assignments and instructions from managers, and arranging for special deals for themselves or friends to rent the [city's civic] auditorium." Early this year, City Manager Isiah Turner got into hot water when it was discovered that his wife was an executive at US Filter, a company vying to take over management of Richmond's wastewater treatment facility.

The city's reputation is so bad that members of the City Council advertise rather than deny Richmond's shortcomings. Councilman John Marquez is running for mayor on an anticorruption platform with the slogan, "Flush out the #*!%$ at City Hall!" The slogan features an accompanying visual of a toilet. Only in Richmond, muses Kevin Reikes, Marquez's campaign consultant, can a convicted felon like Darrell Reese continue to thrive. "That's how putrid the politics are in Richmond," Reikes sneers. "They allow Darrell Reese a seat at the table and even welcome him." (Marquez has himself accepted a $2,500 campaign donation -- the maximum under city campaign finance rules -- from Reese's pals at the firefighters' union.)

Reese is cagey about divulging his business and campaign activities. Yes, he has business clients whom he won't name; he won't even say whether they are doing business in the city of Richmond. And then he has a variety of unofficial, unpaid campaign duties that won't show up on paper anywhere: He's an unpaid adviser to council candidate Lynn Wade, a political novice recruited by the firefighters to challenge Rev. Charles Belcher, who opposed union contract demands; he's an unpaid adviser to Black Men and Women, the "independent" political action committee that coincidentally seems to endorse Reese's favored candidates like Lynn Wade, an Asian woman running against an African American; and he's an unpaid "friend" helping out Local 188 with political strategy and media.

Jim Russey, president of Local 188, says he has no qualms about associating with Reese even after all his recent legal troubles. "He was one of us [a firefighter] for more than thirty years," Russey explains. "He's been doing [campaigns] a long time and has valuable expertise and contacts." Reese also turned the Richmond firefighters' union into a political machine, Russey adds. And a potent machine it is: For a quarter of a century the firefighters' union has been, next to Chevron, the most dominant political force in town. "I convinced the firefighters to embark on a political course that they'd never done before," Reese says proudly. "We initiated our own political activities. We did all our own brochures; I did the media stuff. I learned how to do it through trial and error." The efforts paid off. In 1975, after Reese and the firefighters helped elect a friendly slate of City Council candidates, knocking off a couple of incumbents in the process, the firefighters negotiated an impressive twelve percent raise.

It was a gilded calling card: Darrell Reese had become a force to be reckoned with. By 1983, Reese's interests had moved beyond that of Local 188. That was the year he hooked up with flamboyant San Francisco financier J. William Oldenburg, the one-time owner of the Los Angeles Express of the now-defunct United States Football league, who was soon to be caught in the middle of that era's savings and loan scandals. Oldenberg approached the city of Richmond seeking a zoning change for 365 acres of open land on which he intended to build a posh condominium complex dubbed Park Glen. According to press reports at the time, Reese sat in on meetings with Oldenburg's aides and, when opposition to the development surfaced, he went to work on behalf of City Council candidates who could be relied on to be friendly to the developer. Oldenburg ultimately got his zoning change, thanks in part to a last-minute switch by councilmembers who had previously expressed opposition to his proposal. The turnabout attracted the attention of the San Francisco Examiner, which eventually printed a story alleging Oldenburg had offered $3,000 in campaign donations to three councilmembers in exchange for their votes. It also attracted the interest of the FBI, which began snooping around Richmond and asking local players about the Park Glen project's controversial approval.

In the end, the project was never built and Oldenburg sold the Richmond land -- which he reportedly bought for under $1 million in the '70s -- to another of his reported holdings, the Salt Lake City-based State Savings and Loan Association, for $55 million, a sum federal authorities said was wildly inflated. Federal officials accused Oldenburg of engineering a paper deal to cover other debts as the savings and loan scandal unfolded, but federal indictments never produced a conviction. Although he found himself caught up in Oldenburg's legal maelstrom, Darrell Reese emerged unscathed. "I testified before the grand jury," Reese told the Chronicle. "As far as I was concerned, we were completely exonerated."

Despite the Oldenburg scandal, Reese's stature continued to grow, but he hadn't yet been crowned political boss of Richmond. That title still belonged to Bert Coffey, a former state Democratic Party chairman who had run Richmond politics from behind the scenes for decades. A tough-talking New Yorker, Coffee came out from the East Coast to organize the chemical workers' union at Richmond's Chevron refinery after World War II. Quickly becoming active in Democratic Party politics, Coffey went on to help elect Jack Knox to the Assembly and George Miller to Congress. While Knox and Miller focused on their jobs in their state and national capitols, Coffey handled the dirty work of running the Democratic machine in West Contra Costa County, including Richmond. "There was a time in Richmond," recalls former Richmond Councilman Jim McMillan, "that if you wanted to run for anything it was advisable you talk to [Coffey]."

Though both Coffey and Reese boasted labor backgrounds, their personal styles differed greatly. Coffey was known as a high-strung character who had no reservations about dressing people down publicly if they pissed him off. Reese, on the other hand, was more low-key. He talked with a steady Oklahoma drawl. He also had no reservations about publicly criticizing anyone who pissed him off, but he would do it with negative campaign brochures instead of face-to-face confrontation. Direct threats, sources say, weren't his style. "He [Reese] sort of soft-pedals," says McMillan. "He may say, for example, 'Well, you know, I would like to support you and I don't like your position on item one, two, and three, so that means I'm going to have to run somebody against you, and I have a person who has the capability of really winning and I'm sorry about that.' That's the kind of thing he does."

In 1988, East Bay Municipal Utility District board member Jack Hill was up for reelection. Reese decided to take on Coffey directly by backing challenger John Gioia against Hill, who had Coffey's support. Reese helped guide Gioia -- who later went on to become a county supervisor and Reese nemesis -- to an upset victory using money from the Richmond firefighters' PAC to pay for devastating hit pieces against Hill. The student, Reese, had beaten the master, Coffey.

It was around this time, however, that Richmond insiders began to wonder why the Richmond firefighters' union was getting involved in things like a local water district campaign. Then-councilman Dave MacDiarmid had his suspicions. Since coming onto the council, MacDiarmid had butted heads with Reese on numerous occasions. He'd refused to back Oldenburg's Park Glen proposal and other developments pushed by Reese. MacDiarmid also had the temerity to accuse Reese of running his consulting business while on duty as a firefighter. (Reese always denied the charges, and was never punished.)

When MacDiarmid saw the hit pieces against Jack Hill in the 1988 EBMUD race, he noticed that the return address on the mailers was the address for Richmond's fire station in El Sobrante. Furious, MacDiarmid filed a complaint with the state Fair Political Practices Commission. MacDiarmid believed that Reese had personal reasons for attacking Hill: The EBMUD incumbent had previously raised a fuss over the costs of supplying water to a development proposed by one of Reese's clients, Dame Construction. Reese made MacDiarmid pay for his heresy during the latter's 1991 reelection campaign; Reese hit him for putting his vote up for sale on a development (a charge MacDiarmid adamantly denied), and for doing construction work on his home without the required building permits, which MacDiarmid admitted to and apologized for. Apologies, however, weren't good enough, and MacDiarmid lost his seat on the City Council. Reese makes no apologies for his shoot-first campaign style. "It's the way the process works," he says. "It's the responsibility of everyone in the political process to bring up the negatives of their opponents. If they don't, they're failing the process."

By the early '90s, Bert Coffey had grown ill (he died in 1994), and there weren't many people in Richmond lining up to succeed the grand old man. But there was one: Darrell Reese. "I think my political stature increased during that time," Reese muses, "because there was a void. There were not really any talented people who came forward in Richmond at the time. I think that was more the reason [for Reese becoming the town's perceived power broker] rather than that I had any extraordinary power. There was just a void."

So big was the void that, by virtually all accounts, Darrell Reese personally selected Richmond's city manager in 1993 -- even though Reese was neither a councilmember nor a city commissioner. The man Reese picked to become Richmond's top executive was a high-level administrator in Broward County, Florida, named Floyd Johnson. "I probably had a major role in getting [Johnson] hired," Reese now acknowledges. "I did call him back in Florida. I did ask him to fly out here and meet me in Emeryville. I did sit together with him during meetings with members of the City Council. He was hired. But I can't take full credit."

Despite owing his $123,000-a-year job to Reese, Johnson gradually developed a reputation of independence. Reese says he ultimately had a falling out with Johnson over the city manager's unwillingness to fight a proposed "good neighbor ordinance" for Chevron. "Here was the principal taxpayer in the city being hung out to dry," Reese complains, "and [Johnson] is staying out of the fray. It was all ego."

In the fall of 1997, in a closed session at one in the morning, the City Council decided not to renew Johnson's contract; the vote was five to four. While Reese could take most of the credit for getting Johnson hired, he couldn't do so for getting the city manager fired. Among those voting to oust Johnson was Reese's longtime nemesis, Councilman Tom Butt (Reese allies Nat Bates and Richard Griffin also voted to oust Johnson). A year earlier, Butt had authored a lobbyist registration ordinance specifically aimed at Reese, who by now had retired as a firefighter and was working as a consultant full-time.

After Johnson's ouster, Butt drafted resolutions, as the West County Times put it, to "guard against informal influence by lobbyists and businesses in the council's choice of the next city manager." Anyone reading between the lines knew what Butt really meant was "Don't let Darrell Reese select the next city manager." Nonetheless, the council went on to select someone who had the blessing of Reese and the firefighters: Isiah Turner, Richmond's then-deputy city manager. "It's nothing new," sighs Richmond Mayor Rosemary Corbin, a Reese critic who was first elected to the City Council in 1985. "Every city manager we've had since I've been here has had Darrell's stamp of approval." After the November 1997 election results were posted, the Contra Costa Times hailed Reese as one of the evening's top winners. Reese and the firefighters' union had helped defeat Measure H, a proposed $12.5 million city tax, by a two-to-one margin. On top of that, Reese's three City Council candidates and two of his three school-board candidates also won.

The celebration didn't last long. A month later, Reese and union leaders were stumbling to answer questions about the source of the firefighters' campaign war chest. For years, it had been an unofficial pastime among Richmond political insiders to speculate from where the firefighters' PAC really got its money. Given the size of the fund, it couldn't all have come from the dues of local union members, cynics said. The math just didn't add up. Many suspected that the firefighters' campaign kitty was secretly being sweetened by Reese's developer clients. The PAC filed a financial disclosure report that, for the first time, listed contributions from retired firefighters as well as active members. And, interestingly enough, all of the retired firefighters seemed to have donated the exact same amount: $157.42. Together these contributions combined to make up nearly $15,000 of the PAC's reported $39,000 in donations that election cycle. And 93 current firefighters were listed as giving the same amount. When curious reporters began calling the retirees to confirm their donation, they discovered that none of them had given a penny to the PAC. One told the Chronicle, "I did not send them $157. I don't donate that kind of money. Tell them to send it back to me."

Reese later admitted to engaging in a bit of creative accounting to get around Prop. 208, a voter-approved campaign finance law that limited individual donations to $250 (Prop. 208 has since been replaced by new rules under Prop. 34.). Reese said that he had listed the retirees, whom he described as "honorary members," after getting some bad advice from the FPPC. The true source of the funds, he revealed, was the annual Bentley Brothers Circus benefit held earlier in the year for Local 188. But that revelation raised other questions. The circus event had been billed as a fund-raiser for kids' charities -- not for a political action committee directed by Darrell Reese. This Reese rationalized in an interview with the Chronicle: "One might even argue that using it for political campaigns was charity work. For instance, we fought the scam the city was trying to put on with Measure H. As far as I'm concerned, the use of our money to save Richmond voters millions of dollars is a very charitable activity."

That argument may have amused the press, but the FPPC wasn't laughing. The state regulatory agency later fined the union's PAC $17,000 for misrepresenting the source of its contributions.

And then, just when it seemed like things couldn't get any worse for Reese, he suddenly found the FBI knocking at his door.

The $200 million Richmond Parkway is the largest public works project in the city's history, and construction contractors competed fiercely to get a piece of the action. The most important part of the project was a 7.6-mile link between Interstates 80 and 580, which Richmond city officials viewed as vital to encouraging future economic development. The year was 1996 and Richmond hadn't yet enjoyed the financial benefits of the Internet boom. This project seemed like its best chance to cash in.

Three construction firms submitted bids to build the roadway connection: Bauman Landscape, Ghilotti Brothers of San Rafael, and Ghilotti Construction Co. of Santa Rosa. Of the three, Ghilotti of Santa Rosa submitted the highest bid -- $250,000 higher than the lowest bid. Darrell Reese decided to pay a visit to Jim Ghilotti, the head of the Santa Rosa firm, to see if he might be interested in securing Reese's services as a consultant. According to Reese, Ghilotti initially turned his offer down. But a week later, Ghilotti changed his mind. Reese then helped Ghilotti get the contract in spite of his high bid by persuading the council that the firm offered the most aggressive plan to hire minority-owned subcontracting companies.

After winning the contract for his client, Reese says he drove to Santa Rosa to collect his consulting fee. But when Reese got there, Jim Ghilotti seemed agitated. The construction executive, who would later blow his brains out after leaving his wife, didn't want to pay the money he owed Reese. As Reese recalls, Ghilotti claimed he had found it embarrassing to explain to his business partners why he was paying so much money for Reese's services. "He [Ghilotti] starts proposing to me all types of illegal things that I was going to have to do to get the money he owed me, which I had legally earned," Reese says. "He said, 'Mr. Reese, this is very embarrassing, but it's hard to explain to the company why I'm giving you all this money. So why don't we do this: You tell me which politicians we're paying off, and I won't have to give you so much money and it won't be so embarrassing to me."

At that point, Reese says, he got up and walked out of Ghilotti's office. "I later come to find out," Reese reveals, "that Mr. Ghilotti had a wire on. It was an FBI sting." Reese found about the sting at around eight in the morning of October 13, 1999, when three FBI agents and three men from the IRS came to his Rodeo home. The intimidating federal presence that morning "showed the prestige of my office," Reese says laughing, but he was not laughing at the time. The feds questioned Reese about the Richmond Parkway contract and his strange conversation with Jim Ghilotti. The G-men took his wife and his son in separate rooms and threatened to put them in jail if they didn't talk.

"Do you know what a 'bag man' is?" Reese remembers an FBI agent asking. Of course he knew what a "bag man" was, Reese replied. But he wasn't a bag man, no matter what the feds suggested. "I knew I didn't pay [off] any politicians," he says.

That day, the FBI also interviewed members of the Richmond City Council, as well as Reese's old business partner Bud Wakeland and several city bureaucrats, asking all of them about Darrell Reese. The feds also demanded hundreds of official documents from City Hall, including the contracts Reese had signed with Dame Construction and Ghilotti Construction Co. Executives from the Bauman and Ghilotti Brothers of San Rafael reportedly told the grand jury that councilmembers Nat Bates and Richard Griffin had offered to support their bids for $20,000, an offer they say they refused.

While the FBI raid was a disaster for Reese and his political allies, it was sweet music to the ears of a newly formed committee of local liberal Democrats, West County United. The committee included such prominent local figures as Rep. George Miller, former Assemblyman Bob Campbell, Supervisor John Gioia (a former Reese ally), and Richmond Mayor Rosemary Corbin. Formed a month before the FBI raid, the group's leaders had announced that their goal was to transcend the political divisions that had plagued West County politics for decades. While they didn't explicitly say so publicly at the time, combating Reese's machine "had been in the back of our minds," acknowledges Corbin.

Former Richmond councilman Jim McMillan was also a member of the new coalition. At one time, McMillan was the "M" in an influential Richmond political committee that went by the initials BMW and included Nat Bates and Lonnie Washington. The group would later change its name after state Sen. Dan Boatwright, who was being backed by BMW, told reporters at a press conference that the acronym stood for "Black Men and Women." The name stuck, which turned out to be convenient since McMillan left BMW in 1997, complaining that Reese had too much influence over the ostensibly Afro-centrist group.

West County United wound up spending $64,000 attacking Reese and Reese-backed candidates, using the FBI investigation to back its claims. One brochure showed Reese as a puppeteer. It said, "Darrell Reese. He wants to grab control of City Hall with his puppet candidates. He's not a candidate on the ballot. Yet if his slate of candidates are elected, he will call the shots." The FBI raid, combined with the attacks in the mail, were, in Reese's words, "devastating"; only one of Reese's candidates, incumbent Councilman Nat Bates, managed to win. The FBI probe -- which didn't produce any indictments -- ultimately cost Reese $80,000 in attorney fees. Today Reese says he looks back at the ordeal as a learning experience. "There's a realization that your freedom is extremely vulnerable if you want to be politically active. All I can say on it that is every American should have the opportunity to go through it -- it would be a valuable education. They would understand what freedom is. They would understand how vulnerable they are as an individual."

As it considered its endorsement for next month's election in Richmond, the Plumbers and Steamfitters Union, Local 342, put the following query in the questionnaire it has prepared for candidates: "Darrell Reese and the Firefighters Local 188 are often perceived as being in the pockets of out of area lobbyists [who] try to buy access to local candidates. Do you want your candidacy married to the negative connotations associated with the firefighters and Mr. Reese?"

In his campaign brochure, Tom Butt lists ten reasons he should be elected mayor in his primary campaign brochure. Here's one: "Integrity. Tom Butt is the only candidate who has never accepted support from discredited Richmond political manipulator Darrell Reese, convicted by the US Government for felony income tax evasion and penalized by the California Fair Political Practices Commission for lying in connection with funding Richmond political activities." Rev. Charles Belcher, who was appointed to council earlier this year to fill a vacant seat, regularly accuses Reese and the firefighters of handpicking his opponent, Lynn Wade, to take him on after he refused to go along with the union's contract demands.

Outgoing Mayor Rosemary Corbin says that after the 1999 election debacle, Reese can no longer claim to his would-be business clients seeking favors from the city that he owns five votes on the nine-member city council. "As long as he controls five votes on the council, she says, "he's going to be active. That's what he's fighting for in this election." Reese, meanwhile, isn't surprised by all the attention, and admits that if he were on the other side, he'd be making Darrell Reese, "convicted felon," an issue, too.

"It's their responsibility to convince the voters that I am, in fact, evil," he reasons. "And not only that I am evil, but that I also have this tremendous power and can influence events. They have the burden of convincing voters of that. On the other hand, it's my job to show that I'm a regular type of guy that was a victim."

This year Reese is backing an intriguing mixture of candidates, some of whom, like council aspirant Maria Viramontes, he opposed and attacked in previous elections. In 1995, Reese backed attorney Jim Rogers, the "People's Lawyer" from late-night TV ads, in his successful campaign against Viramontes for county supervisor. Rogers, by the way, is now running for Richmond City Council with the endorsement of the firefighters (although he is refusing donations from the union). As everyone expected, Reese and the firefighters are backing incumbent Richard Griffin. The wildcards in Reese's slate are Wade, a political novice, and mayoral hopeful Nat Bates, who faces the daunting task of going up against the West County Democratic machine, which is backing his opponent, Irma Anderson.

This past week, Richmond voters received a nine-page, full-color campaign brochure. The glossy piece all but accuses Butt of being a racist and claims that Butt's complaints about widespread corruption ignited the FBI's unproductive investigation of four African-American politicians and Darrell Reese. Although BMW reps claim credit for the piece, Butt says it has "the unmistakable imprint of Darrell Reese."

Indeed, the brochure features Reese as a falsely accused hero who is really a "victim of an unfair tax law." The piece even includes a photo of Reese as a young firefighter alongside a commendation he received for bravery in 1960. Asked if he had anything to do with the concept and production of the BMW piece, Reese says slyly, "I passed along some information."

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