Ex-American Apparel Chief Rallies Workers To Organize At Secret Meeting

Dov Charney appealed to more than 300 current and former textile workers this past Saturday in a backyard meeting in South Central Los Angeles. The American Apparel founder was officially fired in December but refuses to walk away from the company he created in the late ’90s.

Jason Wells / Via BuzzFeed

LOS ANGELES — Standing among more than 300 current and former American Apparel textile workers, Dov Charney took the microphone and launched into an impassioned speech.

“Don’t ask what you can do for me. Don’t ask what you can do for yourselves. Ask what you can do for the company,” the ex-American Apparel chief executive said as the workers erupted into applause.

It was a scene that could have played out years ago on the floor of American Apparel’s downtown Los Angeles factory. But this past Saturday, the backdrop was the concrete backyard of a modest home in South Central L.A., just one day after the company’s new CEO sent a Spanish-language message to factory workers, warning them of “external forces trying to cause trouble and affect our business.”

Surrounded by current and former factory workers — many of them shareholders — Charney relayed his version of the events that led to his official ouster in December after the company’s board first moved to fire him last summer.

To keep the company from being sold, Charney said, he put his trust in a hedge fund named Standard General that effectively gained control of his stake in the business. But rather than represent his interests, the firm went against him, installing a board designed to carry out their will, he said.

As a translator relayed each new revelation to the crowd in Spanish, the workers gasped like they were watching a soap opera.

The people now in charge of American Apparel, Charney continued, don’t know how to manage the delicate balance between the factory and the stores. Products aren’t getting made, they don’t know what to produce, people are getting fired, and hours are being cut, he contended.

What’s more, they don’t have a connection to the history of the company, “and it’s dangerous,” Charney told the employees.

Now, it was time to hit back — the workers must organize, he said.

“It’s not about me, it’s not about you; it’s about us and the special connection we have,” he told the crowd.

After being asked about the worker gathering, an American Apparel spokesperson said the company “is and always has been a brand deeply rooted in social commentary.”

“As such, we support our employees’ right to free speech,” the spokesperson said in an email to BuzzFeed News. “And we remain committed to our core principles of providing fair wages to employees, and to sweatshop-free manufacturing right here in the city of Los Angeles.”

Jason Wells / Via BuzzFeed

The gathering was the latest twist in the long American Apparel saga that began last summer. Charney, who has been unable to regain managerial or financial control of the company he created since his ouster last June, is now appealing to American Apparel’s factory workers, who are central to the retailer’s sweatshop-free, “Made in the USA” ethos.

It’s a vulnerable, largely immigrant workforce that’s faced a slew of uncertainty since American Apparel’s management upheaval began this summer, as Standard General took control of the company and most of the executive ranks turned over. While American Apparel’s new Chief Executive Paula Schneider started in January, it’s still struggling to stabilize — just last month, Schneider had to address an internal pro-Charney email campaign waged by an anonymous current employee, and made headlines for firing two longtime creative directors who worked under the founder.

Schneider seems aware of the potential for unrest among the textile workers, sending an email in Spanish to staff on Friday, reassuring them that their jobs were safe, and warning of “external forces” intent on harming the company. The full memo, obtained by BuzzFeed News, is published below.

It’s unclear how organizing a workforce coalition will help Charney win back his place atop a company that currently won’t even allow him to set foot on the factory floor. But the former executive told his troops on Saturday that it would be in their interest to have him reinstated as the head of American Apparel. He promised better working conditions, a return to the free-spirited culture that made the brand successful, an emphasis on loyalty to the factory workers.

“It’s about where we’re going to go,” Charney said to applause on Saturday. “It’s about sticking together.”

The audience needed little convincing, surrounding Charney for photo ops like a rock star after his address, as representatives of Hermandad Mexicana, an immigration advocacy group, diligently set about taking down names and phone numbers. Later today, the group, which is calling itself the “Coalition of American Apparel Factory Workers United to Save American Apparel,” is expected to issue a statement about the meeting.

Maria Luisa Salgado, a spokeswoman for the group, said the company’s current management “is estranged from the cultural spirit that existed at American Apparel under the leadership of its founder, Dov Charney.” She complained of intimidation and interrogations of organizers by “large and gruff security guards,” calling it “a violation of the United States Constitution and the National Labor Relations Board Act.” In the statement, the group called for an end to “blind reduction” of production hours and the furloughing of workers.

A source inside the company said any cutback in hours is a seasonal adjustment, especially given the holiday quarter, typically the busiest for retailers, just ended.

Charney, who founded American Apparel in 1998, was served with a termination letter in June for a long list of reasons including breaching his fiduciary duty, violating company policy — including sexual harassment and anti-discrimination policies — and misusing corporate assets.

The ousted executive worked as a paid consultant for American Apparel during an internal investigation that began in July, but he was officially fired in December. Charney’s lawyers described the investigation as “a complete sham” and said the decision to terminate him was “completely groundless.” Since then, a group of employees operating under the moniker #TeamDov has started a website petitioning for his return.

American Apparel’s new executives are aware of the pro-Charney insurgency within the retailer. One employee has been sending mass emails to employees slamming new management and Standard General, leading Schneider to respond to the messages in a Feb. 19 memo, BuzzFeed News reported last week. The #TeamDov website, with hundreds of messages showing support for Charney, is publicly accessible.

“I encourage you not to be influenced by unfounded personal attacks or baseless threats about job security sent by outsiders who do not have the company’s best interests at heart,” Schneider said in last week’s memo.

Standard General, for its part, said in December that its goal is to “help American Apparel grow and succeed.”

“We supported the independent, third-party and very thorough investigation into the allegations against Mr. Charney, and respect the board of director’s decision to terminate him based on the results of that investigation,” a Standard General spokesperson said in an email at the time.

American Apparel’s shares have fallen 16% this year to 87 cents each; they fell 16% last year as well. The company hasn’t posted an annual profit since 2009.

American Apparel, similar to chains like Chipotle and SeaWorld, lists unionization as a risk factor in regulatory filings, noting that the formation of such a group could halt work, raise labor costs, and hurt the company’s relationship with its employees.

American Apparel has historically prided itself on paying more than the minimum wage to sewing staff and other manual laborers and offering them benefits like on-site health care and massages, subsidized lunches, and affordable health insurance. Its workers have never unionized, though Charney noted he’s not “anti-union” in a 2004 interview, adding that if American Apparel’s workers wanted a union “they would have one.”

American Apparel CEO Paula Schneider sent this email, in Spanish, to workers on Friday, a source told BuzzFeed News. The translation is below.

Obtained by BuzzFeed News / Via Source

Translation of above email from American Apparel CEO Paula Schneider:


Dear appreciated employees:

As you know, I started at the company at the beginning of the year. I am writing to you to promise you that our commitment to you is still the same.

You are incredibly important to us: American Apparel wouldn’t be a success without your hard work and dedication. This company is much more than clothes-making. We stand up for fair wages and the equal treatment of our employees and all human beings. We will never abandon these values.

I would like to talk about a few things that you have probably heard. Over the past five years, days or hours of work have been cut down, this is not news. The decrease in work that you have seen will balance our inventory, so that we can position ourselves to start the summer/fall season, in full force. Salaries and benefits are still the same. The company is stable. These facts are true now and in the foreseeable future.

I know you feel that Dov fought for you. He protected you, your work and family. I know it must be hard to see him leave, and I will always support your right of expression.

I highly respect what Dov has built here. Like you, I am thankful to him for having started this company. Many of you don’t know me yet, but I share the same passion for the company, and the same belief in employees’ rights. All we do is pursue the goal of making this company great so that we can continue employing the highest number of possible employees with the benefits you deserve.

Please, know that there are external forces trying to cause trouble and affect our business. I ask you please, do not misinterpret actions. I did not come to American Apparel to change its values or its culture. I took this job because I believe in the company’s spirit, the one it has had and will always have. This is just the beginning of our relationship, but I would like to ask you for your trust that together we will achieve impressive things. It’s an honor for me to be the leader of this great company, and above all, to work with all of you.

Yours sincerely,

Paula Schneider

Via Translated by Mariana Marcaletti/BuzzFeed News

With reporting assistance from Mariana Marcaletti.

Read more: http://www.buzzfeed.com/jasonwells/ex-american-apparel-chief-rallies-workers-to-organize-at-sec


Behind A Huge Bribe, A Tale Of Pollution, Profit, And Economic Transformation

Behind the largest undercover bribe the FBI ever paid to a public official is the story of how our whole consumer economy has been transformed, bringing lung-stunting pollution and, in some cases, political corruption.

MORENO VALLEY — The largest bribe the FBI has ever paid to a public official in a sting operation wasn’t to a United States senator or even a state lawmaker. It was to a lowly city councilman in this gritty, unglamorous Los Angeles exurb, where a fifth of the population lives below the poverty line, and local headlines play a steady drumbeat of grim news such as the daytime murder of a grandmother at a gas station.

Former Moreno Valley City Councilman Marcelo Co. AP Photo

Councilman Marcelo Co didn’t seem particularly interested in improving the town. Even as he ran for office in 2010, he faced criminal charges for renting out apartments that were slummy and unsafe. Midway through his first term, he was caught on tape taking $2.36 million in cash from an undercover agent he thought was a land developer. Co told the agent that for enough money he would vote “yes” on any land-use plans. “I don’t care if it’s the shittiest can of worms,” Co said.

Despite Moreno Valley’s depressed property values, control over its land is actually worth a fortune. Indeed, nearly every major retailer in the world covets the kind of real estate the city offers: empty acres near freeways and train tracks at the epicenter of one of the largest but least noticed land rushes in America.

This arid flatland, shimmering and indistinct in the heat and smog, is just perfect for warehouses. These are not, however, warehouses as most people think of them. These are massive, futuristic behemoths that have proliferated on a scale seen nowhere else on the continent to usher in goods from Asia to consumers across a vast swath of the United States.

Americans have grown to expect the goods they want delivered to their homes or nearby store shelves within days or hours. But all this two-day shipping, click-to-ship, and get-it-on-your-doorstep-by-noon-tomorrow has come at a price, paid by the people who live in the shadows of the mega-warehouses: lung-stunting, cancer-causing pollution and, in some cases, political corruption.

The underside of our consumer economy can be seen in a tale of two cities, just 20 miles apart. There is Moreno Valley, where developers have shoveled in money to win the political approvals to build new warehouses. And there is Mira Loma, a tiny community already awash in warehouses and suffering some of the worst pollution in America.

“Everyone wants a new flat-screen TV,” said Ed Avol, a professor at the University of Southern California’s Keck School of Medicine who has spent the last two decades studying the effects of air pollution on children. “Everyone wants new clothing. But nobody thinks about how it got [to them.]”

Warehouses line both sides of Etiwanda Avenue as it stretches out into the Inland Empire. Photograph by Jesse Kaplan for BuzzFeed News / Via jessekaplanphoto.com

Moreno Valley and Mira Loma lie in the vast sprawl east of Los Angeles known as the Inland Empire. Three decades ago, the area was a bastion of orange groves, military bases, and light manufacturing. But in recent years, a number of Inland Empire cities, which even many Southern California residents couldn’t locate on a map, have quietly become pivotal to a transformation in the global economy.

Shipping containers at the port of Los Angeles. Courtesy of the port of Los Angeles

More than 40% of all shipping containers imported to the United States enter through the ports of Los Angeles and Long Beach. Most of that cargo then moves through the Inland Empire. It either passes through or stops off at distribution centers serving Amazon, Wal-Mart Stores, Target, Costco, Home Depot, Restoration Hardware, Baskin-Robbins, Nike, Nordstrom, Kraft Foods, Toys ‘R’ Us, Ford, BMW… the list goes on and on.

If you live anywhere in the United States west of about Chicago, and you eat, wear, watch, play, sit on, or drive a product bought retail in recent years, chances are good that it came through this area.

And if you live in the Inland Empire, you’ve watched giant flat-roofed buildings that resemble alien spaceships march across the landscape with a speed some compare to a raging forest fire.

There is now enough industrial space in Riverside and San Bernardino counties — the two counties that make up the Inland Empire — to enclose almost half of Manhattan. Industry experts estimate that the area needs at least 15 million additional square feet every year just to keep pace with demand.

That, in and of itself, might not be so bad for the air. But getting the goods in and out of these warehouses requires trucks and trains. Thousands upon thousands of them, passing through in a ceaseless tide, creating a dull background roar, and contributing to some of the worst pollution in America.

Although air quality overall in Southern California has improved in the last two decades, according to the South Coast Air Quality Management District, the area has had among the nation’s worst ozone pollution almost every single year since 1988 and the worst fine-particulate-matter pollution in Southern California since the agency began measurements in 1999.

The well-defined line between the residential neighborhood of Mira Loma (right) and the massive warehouse structures in the area (left). Photograph by Emily Berl for BuzzFeed News

The community that epitomizes the pollution warehouses can bring is Mira Loma.

“Our quality of life is in the tubes,” said Gene Proctor, 73, who has lived in Mira Loma Village for 43 years. “I wish people shopping in Tucson, Arizona, in other places, I wish they could see the little kids around here, their respiratory problems.” His great-granddaughter has asthma, and his 3-year-old great-grandson, he said, “coughs like a smoker.”

Mira Loma Village, shown in green, is almost completely surrounded by warehouses.

Population 21,000, Mira Loma is so small and poor it doesn’t have a movie theater, a community center, or even a moderately upscale restaurant. What it does have are 90 warehouses and a whole lot of big rigs: Trucks rumble through 15,000 times every day. In just half an hour on a recent afternoon, 269 trucks passed by the big plate glass window in the front of the Farmer Boys truck stop on Etiwanda Avenue.

That is more than one every seven seconds.

Avol, the professor at the USC Keck School of Medicine, began visiting the town in the early 1990s as part of a study of air pollution and children’s health across Southern California. Back then, he said, researchers chose Mira Loma because it sits at the “end of the tailpipe” of the Los Angeles basin, meaning the prevailing winds off the Pacific Ocean blow L.A.’s infamous smog east until much of it arrives in Mira Loma. So it was rural yet had a lot of ozone and smog. Other places in the study, such as Santa Barbara and Long Beach, were picked because they were thought to boast clean air or because they were in industrial areas.

When the study began, Mira Loma residents complained to researchers about the smell of dairy cows, herds of which clustered on vast pastures and cow yards. But in 1987, Riverside county supervisors revamped the general plan for Mira Loma, clearing the way for massive warehouse development.

“In the course of a few years, the dairies disappeared,” and what had been “open pasture became streets and warehouses, lined with trucks,” Avol said. “Mira Loma turned out to be a very interesting place to study.”

The trucks made the already bad air worse, bringing in diesel particulates, very small particles that can enter the lungs and travel to tissues throughout the body. They are associated with asthma, heart disease, neurological problems, and cancer.

In Mira Loma, children were found to be growing up with stunted lungs compared with children living in places with better air. Their lungs were growing at a rate that was 1 to 1.5% slower, Avol said, so that “after their teen years, they were about 10 to 12% lower in lung function than children who had grown up in cleaner places.”

He added: “We have no information at this point that supports the idea that they ever catch up.”

Studies from other Inland Empire communities are also dire. In a neighborhood near the BNSF rail yard in the city of San Bernardino, Loma Linda University researchers found that adults have more respiratory problems, and children alarmingly high rates of asthma, even when compared with other polluted communities.

Warehouse industry officials, along with Barry Wallerstein, the head of the South Coast Air Quality Management District, insist that it is possible to build jumbo warehouses that do not pose a threat to public health. The key, Wallerstein said, is taking steps such as requiring that “clean” trucks service them and ensuring that traffic going in and out does not abut residential areas.

And yet, time and again, records and interviews show, officials failed to consider health impacts when approving warehouses.

A 2002 investigation by the Riverside Press Enterprise, the local paper, examined the dozens of warehouses approved to be built in Mira Loma between 1987 and 2000. County planners couldn’t point to a single one in which they had required a detailed environmental study.

A spokesman for the county said it has “improved environmental protection,” and indeed as lawsuits from environmentalists and disconcerting health studies have piled up, officials across the Inland Empire have been ordering environmental reviews. But that doesn’t mean they turn down developers’ requests for more warehouses.

In 2011, Riverside County officials voted to allow a 1-million-plus-square-foot complex on one of the last pieces of vacant land near Mira Loma Village despite a study that found it would pose health risks to the people living there.

A local environmental group, the Center for Community Action and Environmental Justice, sued. California Attorney General Kamala Harris joined the suit on the side of environmentalists.

The two sides reached a settlement last year that allowed development to proceed but required local officials and the developer to make the project “greener,” with electric vehicle charging stations and even a potential prohibition on trucks on the road closest to the village.

The settlement also contained a provision that feels ripped from the pages of dystopian fiction: Every home in the village would be offered high-tech air filters so residents could avoid breathing the polluted air right outside their windows.

Lillyana Carrasco is pictured here with her father, Daniel Carrasco, as she leans on a new air filter at their family’s home in Mira Loma, California, on July 12. She was not part of the study that found stunted lungs. Photograph by Emily Berl for BuzzFeed News

The warehouse boom has been propelled by two stark factors: poverty and money.

Many of the cities in the Inland Empire, battered particularly badly by the foreclosure crisis, face bleak economic prospects. Just one-fifth of adults over age 25 have a bachelor’s degree. When people are desperate for jobs, thousands of trucks driving through their community every day seems more tolerable.

Then there is the money: Warehouse developers and the retailers that buy or lease from them have it. When they come in, they bring tax revenues to cash-starved local governments.

And developers donate to the political campaigns of politicians who control land-use approvals. Unlike the bribe Councilman Co took, much if not most of the money surely flows through legal channels in the form of campaign contributions. But it’s hard to find an elected official in the Inland Empire who hasn’t benefited significantly, and in some cases overwhelmingly, from development interests.

That was certainly the case in Moreno Valley. Population 200,000, the exurb sits 65 miles from Los Angeles. At the eastern edge of town, houses peter out into a dusty brown expanse, stretching to the horizon.

The flat land, right by a freeway, is the site of developer Iddo Beneevi’s audacious plan to build what may well be the nation’s largest warehouse complex, a 41-million-square-foot colossus equivalent to 700 football fields called The World Logistics Center.

Long before the undercover FBI operative bribed Councilman Co (and then arrested him), Benzeevi methodically bought land — the city estimates he owns or controls about half the developable land in town — and helped build a political machine in this city.

Benzeevi, as he will tell just about anyone who asks and even some who don’t, believes that “the logistics industry” is the inevitable next step in the evolution of human economic development, the end of a line of progress that leads from agrarian society to the great colonial empires to Apple, which, he claimed, can be seen as just a really cool logistics company.

So far, he acknowledged, Moreno Valley has not been a hotbed of economic innovation. But with his help, he insisted, the city can put itself at the center of world commerce.

Benzeevi has an exquisitely courteous manner, even with those who disagree with him, and a fancier style of dress — suits or pressed shirts — than that favored by most who frequent Moreno Valley City Hall. His long-winded fervor on the benefits of the logistics economy is so well known it is something of a joke in town.

But until fairly recently his focus, like that of so many other developers, was on high-end homes that would rise up from the dry scrub as they had in so many other Inland Empire communities before the housing crash.

In 2005, Benzeevi, reportedly working with Florida-based developer Jules Trump (no relation to the Donald), won approvals for “Aquabella,” an upscale community that would feature estates built around artificial lakes — “real resort living, without the hotel,” Benzeevi told one publication.

He even helped convince the Moreno Valley City Council to rename the part of the city that would include the Aquabella community to “Rancho Belago” — the fact that “Belago” is not a word in English, Spanish, Italian, or any other common language didn’t deter anyone, nor did one resident’s complaint that it sounded “goofy” and “like a casino from Las Vegas.”

Rancho Belago signs were eventually put up all over the eastern end of town — although they were modified slightly from the original design after the city of Beverly Hills complained that they looked an awful lot like their iconic town signs. They still look very similar.

Macey Foronda/BuzzFeed (Rancho Belago), Flickr: Thom Watson/Creative Commons / Via Flickr: thomwatson

The grand project, designed to have “all the charm of an Italian Renaissance village,” was never built. The housing market buckled and crashed, and around six years ago Benzeevi and Trump swiveled to warehouses.

It is easy to understand why. Appetite for warehouse space in the Inland Empire is so voracious that it’s almost sure money — if one can get the land-use approvals and permissions to build.

“It takes forever to get it approved” in California, said Kim Snyder, president of the southwest region for San Francisco-based Prologis, one of the world’s largest developers of distribution centers. “And then sometimes you get sued twice along the way because of some environmental group that contends the wild bunnies won’t have a place to go, or the desert kangaroo or the burrowing owl or what have you.”

For a retailer that needs space quickly, embarking on such a tortuous approval process can make little sense.

So, in contrast to much of the rest of the country, warehouses in the Inland Empire tend to be built on spec, meaning that land developers such as Benzeevi build them and then find companies to rent them — which has never been easier because the gap between supply and demand has never been greater. In just the first eight months of this year, industry experts said, companies snapped up 15 million square feet of warehouse space.

Basically, the business boils down to this: Get approval to build, then watch the profits roll in. Several industry experts estimate that profit margins are consistently in the high teens.

In that context, a developer might like to have as much influence over the land use process as possible.

The Skechers factory store and warehouse in Moreno Valley, California. Photograph by Macey J. Foronda for BuzzFeed News

Even before he turned his focus to warehouses, Benzeevi had been cultivating Moreno Valley’s city council members, lunching with some often, three of them said, at town favorites such as Chili’s and Olive Garden.

Benzeevi also ramped up his Moreno Valley political contributions. Way up. And he did not hesitate to pour money into campaigns against those who questioned his new plans.

“It’s a sad state of affairs that money can practically buy a city,” said former Councilman Frank West. Records show that a Benzeevi-backed political action committee spent more than $60,000 against West and for his opponent. West said he had disappointed Benzeevi by surveying his constituents about whether they wanted a mega-warehouse in their neighborhood. West posed the question as the shoe company Skechers’ national distribution center, developed by Benzeevi, came before the council.

Benzeevi said that he dumped money into the 2008 campaign because the town was “stagnating” and to counter “myths.” Residents, he said, had grown weary of West “cashing in at City Hall while little if anything was happening in Moreno Valley, except for rising crime.”

“We participate in our American democratic process,” he declared, and “the voters make the choices.”

West lost the election. Those still on the council, he said, could hardly miss the point: “If there wasn’t total compliance with Benzeevi’s plan, he had the resources to remove you.”

The Skechers warehouse was approved, and then-Gov. Arnold Schwarzenegger came to the 2010 groundbreaking. The governor mused out loud that he wished Skechers would “create some maybe alligator cowboy boot running shoes.”

The warehouse, which city officials touted as the largest certified green building of its kind in the United States, is more than half a mile long.

In 2008 alone, campaign finance records show that one of Benzeevi’s companies, Highland Fairview, donated or loaned more than $260,000 to local races that, for years before his arrival on the scene, had been won with far lower expenditures. Another big contributor was a land broker close to Benzeevi, Jerome Stephens, who kicked in more than $100,000.

The men did not give their money directly to candidates. Instead, they donated it to a political action committee. In the close-knit ways of small-town politics, that committee had multiple connections to city power brokers.

Moreno Valley City Councilman Richard Stewart Macey J. Foronda for BuzzFeed News

Its treasurer was a lawyer in town named Michael Geller, who sat on the city’s planning commission and who shared a law practice with Moreno Valley City Councilman Richard Stewart, a proponent of the Skechers project.

Their firm represented people who had complaints against car dealers and also did debt collection for one dealer, Raceway Ford of Riverside. At one point, the law firm rented an office suite at Raceway.

Things even got more entwined. In 2008, as the real estate market headed steeply down, the general manager of Raceway Ford, Tom Owings, sold his four-bedroom, three-and-a-half-bathroom home with a pool and spa in the more upscale community of Redlands and moved into a rental house at the edge of the town in Moreno Valley.

Less than two years later, he was appointed to the planning commission, and in 2012, with the aid of campaign contributions from Benzeevi’s ally Stephens, he was elected to the city council. He also received $10,000 from Skechers, which was later fined $2,400 by the California Fair Political Practices Commission for improperly failing to report that and other contributions.

Owings told BuzzFeed News that he sought political office because he believed he could “improve the city’s financial position and make it a better place to live.”

But moving from a grand home in Redlands to a rental in Moreno Valley was notable to some in town, because that is not the usual trajectory for those not in economic distress. And Owings appeared to be doing just fine. According to a financial disclosure form he filed covering the year 2012, Owings had various streams of income including a salary of more than $100,000 from Raceway Ford. He also held between $100,000 and $1 million in various investments.

Owings said he changed his residence because his grandchildren, who had been living with him, moved away, and his house in Redlands was too big. He also wanted to sell it before the housing market crashed even further, he said, and Moreno Valley was closer to his office.

“Snobbish” is how he described people who questioned his move. “People in Moreno Valley are like the people I grew up with, and I feel more comfortable in Moreno Valley,” he said.

Last year, Owings became mayor of Moreno Valley, a position that rotates among council members.

The former car salesman, who looks a bit like an off-duty Santa Claus and is often seen in the company of his golden retriever Shiloh, quickly became known for his snappish temper and habit of berating people who disagreed with him.

Owings said that he wasn’t beholden to Benzeevi and acted independently of him. But he was viewed as a staunch ally of Benzeevi’s, a perception that was fed not only by his voting record but also by statements attacking critics of the World Logistics Center.

Moreno Valley City Council meeting. Photograph by Macey J. Foronda for BuzzFeed News

Other council members appeared to be converts to Benzeevi’s vision of transforming Moreno Valley into warehouse central. Councilman Jesse Molina, who had received campaign donations from the Benzeevi-funded political action committee, told the Chamber of Commerce in 2012 that he had dreamed of the World Logistics Center his entire life. (Later, he said he meant that he dreamed of a vision for that part of town.)

Co, the councilman caught on camera taking money from the FBI, was also often supportive of Benzeevi, although in private he could be less than complimentary about development projects to which he intended to give his vote. During a taped conversation with the undercover FBI agent in the spring of 2012, he confided that he had promised a developer “he would always vote ‘yes’ on the developer’s projects even if it was a ‘pissing can.’” The federal affidavit does not identify the developer.

Benzeevi himself said the humungous World Logistics Center represents a chance for Moreno Valley to escape poverty and the long commutes so many residents must make because there are so few jobs in town.

“Moreno Valley has a historic opportunity,” he said in an interview with BuzzFeed News. Life for many of its citizens, he said, is difficult, buffeted by low-paying jobs, endless hours on the freeway, and a choice between making ends meet and paying proper attention to children who must be left alone for hours on end while their parents commute.

The World Logistics Center, he said, would solve many of those problems. He projects it would create 20,000 permanent jobs and another 13,000 construction jobs, and that it would be the largest “sustainable” development in the United States.

Meanwhile, top city officials had been pressuring staff to push through approvals for Benzeevi’s projects, even though some of his plans violated the city’s building code procedures, according to a lawsuit filed last year by three former city staffers.

Those employees claimed they were also under pressure to go easy on a criminal code enforcement case the city had filed against Councilman Co before he won office. His properties had multiple troubles. For example, he rented out an illegally converted garage to not one, but two families with children. After a child was injured in that garage in 2010, building inspectors found a host of problems including dangerous wiring and substandard construction. The lawyer in charge of his defense in the code enforcement case was none other than Geller, the treasurer for the Benzeevi-backed political action committee.

A construction site in Moreno Valley. Photograph by Macey J. Foronda for BuzzFeed News

Outside city hall, many residents were also growing restive, especially after an environmental study estimated that truck traffic associated with Benzeevi’s World Logistics Center would lead to a significantly increased cancer risk for people living as far as 20 miles away. (Benzeevi told BuzzFeed News “we have been working diligently” to improve the project, and “judgment should be reserved” until the final environmental review.)

Some were also angry that the Skechers project, which backers had said could create 2,500 new jobs, in fact employed only about 600 — and many of those were people who had been relocated from the company’s old warehouse in a neighboring city.

Last month Robotics Business Review hailed the Skechers warehouse as being at “the vanguard” in using new technologies that rely on robots and automation instead of workers for much of the labor within its smooth, white walls. The article noted that the new technologies allowed the company to cut its staffing by nearly 75%.

Asked about those figures and other matters, Lauren Dutko, public relations manager for the company said in an email: “Skechers has no comment for the story.”

Benzeevi called complaints about the number of jobs at Skechers “another attempt to disparage us based on lies and misrepresentations.” He said there were 1,000 jobs projected at the Skechers warehouse and 2,500 in total at the development, which includes two approved but not-yet-built offices.

Around the Inland Empire, some have also begun to question the quality of warehouse jobs. Inland Empire economist John Husing, a consultant to local governments and businesses, said research shows that the median income in the industry is nearly $44,000 — one of the few routes to the middle class in the region for those without a college degree. Many warehouse developers and municipal economic development officials agree with that assessment. But some researchers argue that this rosy analysis doesn’t include contractors and temp workers, who make up a large portion of warehouse workers. Advocates maintain that many of these jobs are low-paid and unsafe, trapping workers in poverty with little chance of advancement, or running them ragged until they get injured.

Iddo Benzeevi outside the Skechers factory store and warehouse. Photograph by Jolie Myers

This was the context, when, in April of last year, boosters and bashers of Benzeevi’s World Logistics Center once again hustled into the gleaming Moreno Valley City Council chambers. Speakers pointed to Mira Loma as a cautionary tale and spoke darkly of air pollution and truck traffic and quality of life destroyed.

Mayor Owings listened to it all. But then he exploded into a tirade that made headlines.

“I’m not gonna let these people continue to lecture us every damn council meeting on how our city sucks,” he said. “I want to make it clear for the record that these people do not speak for the citizens of the city … The people who mind their business, the people who pay their bills … maintain their jobs.”

The mayor also said that he was “tired of the false allegations” and “the innuendo” from “smear merchants” who “degrade the people who are trying to do good.”

One week later, the FBI and the Riverside County district attorney, working together on a “corruption task force,” raided the homes of council members, along with Benzeevi’s office.

Federal officials also subpoenaed tens of thousands of pages of documents from the city, including all records pertaining to Benzeevi’s company, as well as other development projects.

Six months later, in November, authorities revealed that Co had been caught on tape negotiating cash payments from an undercover FBI agent and had agreed to plead guilty to taking a bribe.

The FBI also released a photo of Co sitting in front of a table piled high with cash. The FBI believes it is the largest bribe ever paid to a public official in an undercover operation.

An FBI photo of Councilman Marcelo Co sitting in front of stacks of bribe money. FBI

The length of time between the on-camera bribe, in January 2013, and the revelation of the criminal charges led many to speculate that Co had spent much of the previous year running around town wearing a wire. Co’s attorney, Brian Newman, declined to comment.

Council members took turns declaring their innocence. Owings issued a press release calling himself “a reform mayor” and declaring, “I welcome this probe.” He showed up uninvited at the federal grand jury to offer testimony.

For his part, Stewart claims that his house was not really searched. He said he had begun working with the investigators about three weeks before the raids, after agents showed up at his house and told him he had once been a target but no longer was. Stewart said he thinks he stopped being a target because he had voted against Benzeevi’s wishes on a few occasions.

“I’m not going to reveal any details of what I did with the agents, but let’s say it’s sort of like what is in the movies,” Stewart said.

Benzeevi said he had little knowledge of the investigation but said he had been told “by both the District Attorney’s office and the Department of Justice that we are not the subject” of the investigation.

FBI officials declined to comment. No other charges have been filed.

Geller, the attorney who was the treasurer of the political action committee, said, “They didn’t find anything because there’s nothing to find.”

He added, “People seem to think [the council members] would never have voted for it but for [Benzeevi’s money], but these things are all good for the city. It’s not like they are building a toxic waste site or a slaughterhouse in the middle of the city. All these people saying how terrible it is, they are people who don’t need a job.”

Still, in the wake of the FBI raids and Co’s guilty plea, the town descended into political uproar.

Co resigned last year, after being charged in another, unrelated, criminal case involving embezzling social service funds intended for the care of his own ailing mother.

Mayor Owings was recalled from office in June.

Yxstian Gutierrez, who was hastily appointed to replace Co on the city council, was recently found by a judge to not to meet residency requirements for his district and was removed from office. There was recently a blank spot on the wall of City Hall where his portrait used to hang.

Another Benzeevi-supported council member, Victoria Baca, faces a recall election in November.

Last year, Benzeevi’s Highland Fairview company spent nearly $300,000 fighting the recall campaigns, which he called “an abuse of the political process by a small group of bullies that were declaring people corrupt when those individuals had not even been charged with anything.” Benzeevi said his money was spent on “voter education.”

City Councilman Jesse Molina Macey J. Foronda for BuzzFeed News

Molina, the councilman who made it into the local paper saying he had dreamed about the World Logistics Center his whole life, now says he isn’t sure how he will vote. He also said that Benzeevi hadn’t acted any differently from any other developer. “He’s not a monster,” Molina said. “He’s a businessman.”

None of the turmoil, however, has killed developers’ appetite for warehouse space in Moreno Valley.

Amazon.com recently opened a “fulfillment center” on the south side of town, and has another project under construction immediately across the street. Decker Shoes plans to locate its North American distribution center in town. Procter & Gamble recently opened a distribution center, and Aldi, the German supermarket chain that is a sister company to Trader Joe’s, recently began construction on a warehouse.

Prologis’ Snyder said he believes that Moreno Valley, after a period of chaos, is “back on track.” But he added: “That was one of the most messed up cities we’ve encountered in a long time.” Prologis is interested in two more projects in the city.

Benzeevi’s World Logistics Center, which would dwarf them all, still faces a vote before the City Council.

Trucks pass by the neighborhood of Mira Loma. Photograph by Jesse Kaplan for BuzzFeed News / Via jessekaplanphoto.com

As residents in Moreno Valley debated the future of warehouses, residents in Mira Loma Village woke up one Saturday in July to a radical response to warehouse pollution.

On that blazing Saturday, workers from the Swiss company IQAir descended on the scruffy streets with pastries, sandwiches, bottles of water — and air filters.

Mira Loma resident Adela Ochoa Emily Berl for BuzzFeed News

Some of the residents eyed the workers with suspicion and refused to let them in, but when technicians reached Adela Ochoa’s perfectly kept house, with a bench out front under a tree, the family opened the door and watched as they set up the air purifiers in the living room.

“We know it’s a problem,” Ochoa said of the air. “We feel it in our bodies.”

Still, her grandson works in a warehouse, as does her daughter. They need those jobs.

“If you talk about environmental consequences [of warehouses], one of the things you must do is talk about the environmental consequences of poverty,” said Husing, the economist. “The health consequences of poverty are far greater.”

Down the block from the Ochoas, a gaggle of VIPs, including two local city council members, crowded into Juan and Elvia Rodelo’s modest home to witness the air filters being installed.

The couple, who are in their fifties and speak mostly Spanish, flashed polite but uneasy smiles as their house filled up with strangers.

Less than 10 minutes later, the whole group filed back out, leaving the Rodelos looking a bit stunned.

As he walked out the door, Mayor Pro-Tem Michael Goodland smiled at the couple and said, “Enjoy the clean air.”

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Read more: http://www.buzzfeed.com/jessicagarrison/how-our-shopping-harms-the-lungs-of-california-children


American Apparel CEO Fights Back A Pro-Dov Charney Email Insurgency

The company’s new CEO, Paula Schneider, recently responded to a series of mass emails sent to employees by an anonymous insider. The emails were critical of American Apparel’s new management and the hedge fund backing the company.

American Apparel

American Apparel may have fired its founder Dov Charney last year, but new management is learning that he’s far from gone.

A group of Charney supporters within the company, who operate behind the name and hashtag #TeamDov, have been rallying support for the founder and slamming American Apparel’s new executives and investors through a digital campaign that management is struggling to quell. One employee has been sending pro-Charney mass emails to American Apparel employees through a variety of anonymous addresses during the past two months, causing enough ruckus that CEO Paula Schneider was forced to address the messages in a staff-wide memo on Feb. 19, BuzzFeed News has learned.

Internal memo from American Apparel’s CEO about problematic emails.

Obtained by BuzzFeed News / Via Source

“Over the last couple of months, we all have received ‘blast’ emails from an anonymous outsider criticizing American Apparel, its management and its policies,” Schneider, who started as CEO last month, wrote in a message obtained by BuzzFeed News. “Some of the emails have even been designed to appear like they are being sent from inside the company. I have refrained from responding to these emails because I feel they do not deserve our collective attention.”

She continued: “That said, I cannot let today’s email — which stooped to personally attacking hard-working members of the American Apparel team — go without a response. As a company, we embrace free speech and social commentary by our employees. That is a valued part of our culture. But today’s email provides an opportunity for me to reach out to all of you. I encourage you not to be influenced by unfounded personal attacks or baseless threats about job security sent by outsiders who do not have the company’s best interests at heart.”

The specific email Schneider is referring to accused Standard General, the hedge fund with the most financial control of the company, of “draining” American Apparel and forcing cutbacks at the retailer. The email included a link to a New York Post story about a lawsuit against Standard General, in which unsecured creditors of RadioShack are accusing the hedge fund of timing its investment in RadioShack to maximize a payout from the company’s recent bankruptcy, raising concern that American Apparel could suffer the same fate. The email noted that Colleen Brown, American Apparel’s newly appointed chairperson, was brought on to the board last year by Standard General (though it incorrectly identified her as CFO) and that new General Counsel Chelsea Grayson was Brown’s pick.

“We need Standard General OUT,” the employee wrote in the Feb. 19 email. “We have a bunch of consultants draining our company sitting in a room all day making 6 figures a month. THAT IS NOT AMERICAN APPAREL.”

One of the anonymous emails described the campaign as being about more than just Charney, saying it is also a response to American Apparel “being taken over by corporate Wall Street guys who don’t care about the company or the brand or the image or its employees.”

The emails reflect concern among employees that as American Apparel tries to right itself under new management, it could lose sight of its core values that were championed by Charney. The founder was a vocal advocate for treating workers generously, paying a fair wage, and making high-quality items in America.

A source inside the company told BuzzFeed News that management has spoken of their commitment to the company’s principles, and says it will continue to focus on remaining sweatshop-free, paying fair wages, and manufacturing in the USA.

While Schneider wrote that the emails came from an outsider, BuzzFeed News confirmed they originated from a current employee, who requested anonymity citing fear of retribution. The employee said they have roughly 5,000 americanapparel.net addresses and sent the messages in batches of 500; multiple employees have told the anonymous emailer that the messages have been deleted from their inboxes as American Apparel’s management works to stem the tide.

A spokesperson for American Apparel declined to comment.

The pro-Charney insurgency shows how tightly a founder’s personality can become entwined with a company. Emails prior to the Feb. 19 message centered around gaining signatures and statements for the Team Dov website, which says it’s “a statement of support for Dov Charney and his business vision at American Apparel from workers and executives at all levels of the company and around the world.” Hundreds have since signed the petition.

Charney, who founded American Apparel in 1998, was served with a termination letter in June for a long list of reasons including breaching his fiduciary duty, violating company policy, sexual harassment, and misusing corporate assets.

Charney was working as a paid consultant for American Apparel during an internal investigation that began in July, but was fired in December; the #TeamDov website was born almost immediately after. In a statement on Dec. 22, his lawyers described the investigation as “a complete sham” and said the decision to terminate him was “completely groundless.”

Charney pledged 43% of his stake in the company to Standard General this summer in a deal that apparently soured. He told Bloomberg News in late December that the hedge fund conspired with a board member to oust him after agreeing to reinstate him.

He told the news outlet: “I gave them my entire life’s work and they agreed to put me back in, but instead they used this investigation to fire me. They betrayed me.” Charney has not commented on the current round of anonymous emails and the response by management.

Standard General, for its part, said last December it “supported the independent, third-party and very thorough investigation into the allegations against Mr. Charney, and respect the board of director’s decision to terminate him based on the results of that investigation.”

A Team Dov email sent to employees on Feb. 19

Obtained by BuzzFeed / Via Source

Team Dov email sent to employees on Feb. 16

Obtained by BuzzFeed / Via Source

Read more: http://www.buzzfeed.com/sapna/american-apparel-ceo-fights-back-a-pro-dov-charney-email-ins