29 minute read
Courting Africa
from INSIGHT 32 (2022)
There’s reason to suspect that the FBI search of the Florida residence of former President Donald Trump was improperly intrusive, according to several lawyers. The raid prompted a rebuke from Trump and Republicans more broadly and further escalated political tensions in the nation.
About two dozen FBI agents entered Trump’s Palm Beach resort of Mar-a-Lago at about 9 a.m. on Aug. 8 and left about 10 hours later with “a handful of boxes of documents,” one of Trump’s attorneys on the scene, Christina Bobb, told Insight.
“I didn’t actually get to oversee the search, they wouldn’t let anybody see what they were doing,” she said.
It isn’t clear what legal basis the FBI had for the raid. The agents had a search warrant signed by a judge. However, the affidavit explaining the basis—its probable cause—was filed under seal, and Trump’s lawyers weren’t allowed to examine it, Bobb said.
In general, the agents were looking for “what they deemed to be presidential records,” she said.
“I don’t think there was anything of substance.”
Trump’s legal team will take steps to obtain the affidavit, according to Bobb.
There has been a dispute between the National Archives and Trump about whether he has documents that should be stored at the archives under the U.S. Presidential Records Act.
Trump has been cooperative on that front and had previously invited the FBI to Mar-a-Lago to examine the White House records he had in storage at the time, Bobb said.
“Nothing had been hidden, and nothing had been kept secret from them, which makes this all the more ridiculous,” she said.
Potentially Illegal
“I’m stunned and dismayed,” Marc Ruskin, a 27-year FBI veteran and former federal prosecutor, told Insight. “The disregard for traditional norms and apparent lack of concern with the appearance of impropriety is indicative of an abandonment of even a veneer of independence and objectivity.”
Former federal prosecutor Mike Davis went even further, saying the raid may have been illegally invasive.
“Under the case law, you can’t do a home raid if you can secure the documents through less intrusive means,” he told “Bannon’s War Room” on Aug. 9.
The FBI had to first determine that requests for the documents or even subpoenas wouldn’t be sufficient, said Davis, who formerly advised Sen. Chuck Grassley (R-Iowa) on judicial nominations and now heads The Article III Project.
“There’s zero evidence” that Trump wouldn’t have cooperated, Davis said.
“Therewasnoallegationorevidencethat he [Trump] was destroying any of this evidence or putting it into the wrong hands. This is banana republic-level tactics from the Biden Justice Department,” he said.
Even if Trump took classified documents, he took possession of them when he was still chief executive and had the authority to declassify them, according to Davis.
Bobb suggested that the invocation of classified documents was a disingenuous attempt of “shrouding this in a national security blanket.”
“They don’t want to disclose what they’re doing, because what they’re doing is wrong. And so they want to hide it behind the premise of ‘Oh, it’s a matter of national security and classified documents, so we can’t disclose to you what we’re doing or why we’re doing it. But just trust us. We’re not lying to you,’” she said. “Well, no, the American people aren’t going to stand for that anymore.”
Even if the DOJ tried to charge Trump with withholding documents, it wouldn’t hold up because the statute in question requires a “willful” violation, and Trump would have had to have “some malicious intent” to take specific documents, according to Bobb.
“They would have to lay the foundation that Donald Trump actually packed up his own office” or ordered somebody what specifically to take, she said.
History of Missing Documents
If Trump had documents that should go to the archives, it would add him to a lineup of former government officials.
Former FBI Director James Comey took his handwritten notes when he was fired by Trump in 2017. His home wasn’t raided. He handed the notes to FBI agents who came to interview him.
The Obama administration didn’t just fail to hand over documents; tens of thousands of its documents went missing or were destroyed. No homes were raided.
Former Secretary of State Hillary Clinton failed to hand over tens of thousands of emails and documents from her server, claiming that they were of a personal nature. The FBI was able to retrieve some of the documents, revealing that many were work-related. Moreover, the
About two dozen FBI agents entered Trump’s Palm Beach resort on Aug. 8 and left about 10 hours later with “a handful of boxes of documents,” one of Trump’s attorneys said.
documents were under congressional subpoena at the time when a Clinton aide deleted them.
Immediate Skepticism
The raid prompted an immediate wave of skepticism, particularly because the FBI and the Department of Justice (DOJ) have a history of misrepresenting, breaking protocol, and even forging evidence in their case against Trump and members of his campaign.
“After six years of unfounded, absurd investigations of President Trump, the presumption is that any investigation of President Trump is politically motivated, and the burden of proof is on FBI/DOJ to prove otherwise,” Will Chamberlain, seniorcounselattheInternetAccountability Project, wrote in an Aug. 9 Twitter post.
In 2017, the FBI and DOJ obtained two extensions of a spying warrant on former Trump campaign aide Carter Page even though the warrant was based on false or unsubstantiated allegations. The FBI later acknowledged that spying based on the extensions was illegal.
The FBI also has a history of harsh treatment of people associated with Trump. His aides have been arrested at gunpoint, handcuffed, and “perp-walked,” and their homes and offices have been raided in pursuit of trivial or nonviolent offenses, even when the targets were cooperating with the government.
Shoe on the Other Foot
The Trump raid increased the already polarized political playing field, as Republicans can now argue that home raids of former presidents are acceptable.
“They’re setting a very dangerous precedent where you can do a home raid of a former president of the United States,” Davis said, noting that such a thing has never happened “in our 250 years as a republic.”
Already, Republican lawmakers are promising to subject the DOJ and the FBI to intense scrutiny, with the expectation of reclaiming the majority in the House after the November midterms.
“When Republicans take back the House, we will conduct immediate oversight of this department, follow the facts, and leave no stone unturned,” House Minority Leader Kevin McCarthy (R-Calif.) said in an Aug. 8 statement. “Attorney General Garland: preserve your documents and clear your calendar.”
Judge’s Epstein Connection
The search warrant was issued by U.S. Magistrate Judge Bruce Reinhart in the Southern District of Florida. Reinhart was a senior prosecutor in the U.S. Attorney’s Office for the Southern District of Florida when the office reached a nonprosecution agreement with Jeffrey Epstein, who was later indicted for sex trafficking children and died by apparent suicide in a New York jail.
Upon leaving office, Reinhart went into private practice and represented multiple Epstein associates and employees in civil casesagainstEpsteinbyhisallegedvictims.
Reinhart was appointed a magistrate judge in 2018 by the district judges in the Southern District of Florida.
The warrant was issued on Aug. 5, the day after FBI Director Christopher Wray testified to the Senate Judiciary Committee and was questioned about multiple whistleblower reports alleging the politicization of the bureau. Wray cut the questioning short because he said he had to urgently travel. Flight records indicate he flew in the FBI private jet to his vacation retreat in the Adirondacks, according to New York Post columnist Miranda Devine.
Secret Service and local law enforcement officers stand in front of the home of former President Donald Trump at Mar-a-Lago.
People cast votes for midterm primary elections on in West Columbia, S.C., on June 14.
PHOTO BY SEAN RAYFORD/ GETTY IMAGES
The tactical move boosts Republican candidates they think will be easiest to beat in November
BY CARA DING
2022 MIDTERMS
DEMOCRATS SPEND BIG
IN GOP PRIMARIES
Democrats are pouring millions of dollars to meddle in Republican primaries in a tough election year. Experts say they’re doing so to prop up Republican candidates who they think will be easiest to beat in the general election.
In some races, their wishes have come true.
In the July 19 Maryland Republican gubernatorial primary, Trump endorsee Dan Cox captured the nomination, defeating incumbent-backed
Kelly Schulz by a 10-point margin. Schulz had outraised Cox by a 5–1 margin.
In the weeks leading up to the primary, the
Democratic Governors Association (DGA) spent $2.14 million—almost 11 times the total amount
Cox raised this year—on TV and online ads broadcasting Cox’s platform, according to the campaign finance disclosures filed with the state.
Democrats played the same game in Republican gubernatorial primaries in Illinois, Nevada, and
Pennsylvania, where the candidates who received funding from Democratic sources won. The tactic was also used in Colorado but to no avail.
In California, two GOP candidates favored by the Democrats lost.
According to campaign finance disclosures filed with the above states, the DGA is the top financier of the Democratic money flowing into these
Republican primaries.
DGA is a Washington-based nonprofit organization with a singular mission to elect and reelect
Democratic governors across the nation.
Representatives for the DGA didn’t respond to a request for comments by press time.
According to University of Buffalo associate professor of political science Jacob Neiheisel,
Democrats are doing all they can to stem a potential red wave, including boosting Republican candidates who they think will be easiest to beat in the fall.
“By pushing somebody ideologically far right across the line, Democrats can make the stakes so high for their side and increase their turnout while turning off independents in the general election. At least, that’s the theory,” he told Insight. “If the shoe was on the other foot, I have to think the Republicans would be doing very similar things.”
Neiheisel said it was hard to gauge how effective the tactic was in a particular race without good polling data throughout the campaign and good data on ad buys, such as gross rating points and targeted media markets.
Republican primary voters are also typically more ideological than general election voters Dan Cox won the Maryland Republican gubernatorial primary against incumbentbacked Kelly Schulz by a 10-point margin on July 19. Schulz had outraised Cox by 5 to 1. and favor the kind of candidates promoted by Democrats anyway, he said.
“It is certainly possible that the DGA money tipped the scales. It is also possible that a candidate like Cox is someone who has the support of Republican primary voters.”
In Nevada, Clark County Sheriff Joe Lombardo already led in polls before DGA-backed “A Stronger NV PAC” spent $4.78 million in the gubernatorial race.
“A Stronger NV PAC” was formed in April as an independent expenditure political committee to help reelect incumbent Nevada Gov. Steve Sisolak and defeat Republican gubernatorial candidates, according to its registration form.
The PAC launched a statewide TV campaign broadcasting Lombardo’s platform ahead of the primary. According to a financial disclosure form filed with the state. The PAC’s top funder is the DGA, contributing $4.6 million.
Lombardo prevailed in the competitive 16-way Republican primary with an 11-point margin.
According to University of Virginia commonwealth professor of politics Jennifer Lawless, this tactic is a natural extension of strategic voting at the individual voter level.
“Strategic voting among voters has been around for a while, especially in states with open primaries, where a Democrat would vote in the Republican primary to elect the weakest candidate in the general election. But only a very small percentage of voters do it,” Lawless told Insight. “What we are seeing here is that political elites and Democratic associations are getting involved.
“It is better funded, and it has the potential to have a little bit more of an effect because you are not depending on individual voters to come up with that calculus on their own.”
But it can also be a risky strategy, according to Lawless.
“What we’ve learned in the past several election cycles is that strange things can happen,” she said. “Although Democrats are being careful about where they are doing this, there is still a little bit of risk. You never know exactly who is going to turn out or what can happen in the general election.”
In the swing state of Pennsylvania, one recent poll suggests that Republican gubernatorial nominee Doug Mastriano seems to be in an unexpected potential tight race with Democratic nominee Josh Shapiro. Other polls showed a wider gap.
Shapiro, the state’s attorney general who faced no serious challenger in the Democratic primary, spent an unclear amount of money on a communication campaign broadcasting Mastriano’s platform.
A strong fundraiser, Shapiro had raised $12 million by early June, outraising Mastriano by nearly 17 times, according to campaign finance disclosures filed with the state.
Shapiro defended his spending in the Republican primary in interviews with media outlets, saying that Mastriano was the primary frontrunner and that he was only doing an early general election campaign.
Jacob Neiheisel, associate professor, University of Buffalo
The Playbook: Operation Dog Whistle
This tactic of boosting the other party’s perceived weakest candidate goes back at least to the 2012 Missouri primary.
That year, U.S. Sen. Claire McCaskill (D-Mo.) successfully used it in her reelection bid.
She later painstakingly laid out her playbook in a Politico Magazine article.
One month before the primary, McCaskill made an unprecedented move in her political career:
Sen. Claire McCaskill
(D-Mo.) and her family members during an election night party in St. Louis on Nov. 6, 2012. McCaskill successfully used a tactic to prop up a Republican candidate who she thought would be easiest to beat in the general election. She paid $40,000 to take a poll of Missouri Republican voters.
The poll first asked voters to rank the three Republican candidates in the Senate primary. The result showed U.S. Rep. Todd Akin (R-Mo.) came in a distant second at 17 percent.
However, the result shifted drastically after voters were given details of candidates’ platforms and messages: Akin, a Tea Party Caucus founding member who branded himself as one of the most conservative members of Congress, became the front runner, with 38 percent of the votes.
The poll suggested to McCaskill that if she could help Akin, the weakest fundraiser in the Republican primary, spread his platform and messages among Republican voters, she could very well propel him to victory.
That would, in turn, help her reelection, she figured. McCaskill deemed Akin the weakest Republican candidate among general election voters and the easiest candidate to beat in the fall.
So her campaign produced what they called a “dog whistle” ad, using “reverse psychology” to tell primary Republican voters to not vote for Akin because he was too conservative for Missouri.
“This presentation made it look as though I was trying to disqualify him, though as we know, when you call someone ‘too conservative’ in a Republican primary, that’s giving him or her a badge of honor,” McCaskill wrote in the article.
During the weeks leading up to the primary, McCaskill spent a total of $1.7 million for Akin, more than Akin spent for himself.
As the ad was broadcasted to targeted Republican voters, Akin was inching up in McCaskill’s internal polls, tightening the gap between himself and the front runner. Akin eventually captured the Republican nomination.
Then-Senate
candidate Rep. Todd Akin (R-Mo.) (C) during the 2012 Missouri primary in Wildwood, Mo., on Nov. 6, 2012.
McCaskill went on to beat Akin by a nearly 15-point margin in the general election.
She summed up her “dog whistle operation” by saying that she “had successfully manipulated the Republican primary.”
In 2022, Democrats overwhelmingly used this type of “reverse psychology” ad to meddle in the Republican primaries, too.
The ad often introduced the target Republican candidates as Trump endorsees, 100 percent pro-life, and pro-Second Amendment. It then ended with a tagline such as “Greg Lopez, too conservative for Colorado.”
Democrats are doing all they can to stem a potential red wave, including boosting Republican candidates they think will be easiest to beat in the fall, an expert says.
Greg Lopez was a Republican gubernatorial candidate running against Heidi Ganahl in a two-way primary race. Ganahl outraised Lopez (Lopez raised $154,931 this year) by an 8–1 margin, according to campaign finance disclosures filed with the state.
In the month leading up to the primary, Colorado Information Network IE Committee spent $1.2 million on TV ads and $300,000 on digital ads to broadcast Lopez’s platform.
The committee got the lion’s share of funding, $1.525 million, from Strong Colorado for All. The latter got the bulk of its money, $1.575 million, from the DGA, according to campaign finance disclosures filed with the state.
Ganahl won against Lopez, 54 percent to 46 percent.
Democracy and Voter Responsibility
“I don’t think parties should play in the other party’s primaries. I think it is a poor practice that I urge both parties to stop,” private equity fund Stagwell Group President Mark Penn told
Insight. “It’s happening now with greater frequency, and it undermines democracy to spend money to promote candidates you don’t really want to win.”
Penn served as a former White House pollster to then-President Bill Clinton and as an adviser in Clinton’s 1996 reelection campaign. He also was the chief strategist to Hillary Clinton in her Senate campaigns and failed 2008 presidential campaign.
Daron Shaw, professor and chair of state politics at the University of Texas–Austin, thinks the tactic departs from traditional negative or strategic campaigning and is unconstructive.
Shaw has years of campaign experience under his belt, having worked as a survey research analyst in several political campaigns and as a strategist in the 2000 and 2004 presidential election campaigns.
“It is a naked effort to brand a candidate, but it is being promoted by a group that doesn’t really want the candidate to win. I don’t think we have a term for it. You might call it sort of second-level strategic campaigning,” he told Insight. “A lot of us might have some objections to it. But hey, this is an inevitability of history.”
Shaw said two historic developments set the conditions for candidates and groups to play the tactic.
One is the proliferation of money in political campaigns following the Bipartisan Campaign Reform Act of 2002 and the explosion of internet fundraising. The former opened the door for big interest group money, while the latter led to booming small-donor fundraising.
“Twenty or 25 years ago, money wasn’t this easy, and you wouldn’t have the resources to mess with the other side,” he said.
Another factor is that over the past decades, as U.S. voters pivoted to apply the notion of democracy to the party systems, the parties gradually lost control over the nomination processes, according to Shaw.
“We’ve all heard stories of smoke-filled rooms and state party conventions in which the Republican party tried to set up a ticket that’s going to be competitive across multiple races statewide; the Democrats would do the same. But in the 1960s and 1970s, the parties began to surrender that control,” he said.
“When you open your selection process to a more general system that facilitates input by all members, it opens the door to the kind of tactic we are seeing today.”
Shaw suggested that voters take more care to find out the source of a candidate’s positions and history.
In terms of campaign finance disclosures, every
$4.6
MILLION
WAS CONTRIBUTED by A Stronger NV PAC’s top funder, DGA, according to a financial disclosure form.
$1.7
MILLION
FORMER SEN. CLAIRE MCCASKILL (D-MO.) spent a total of $1.7 million for former Rep. Todd Akin (R-Mo.), more than Akin spent for himself, in a “reverse psychology” strategy to win the election during the 2012 Missouri primary.
Republican gubernatorial candidate state Sen. Darren Bailey (2nd L) celebrates at an election night party in Effingham, Ill., on June 28. state has its own rules. Almost all the Democratic spending mentioned in this article was disclosed to various degrees to the respective state board of elections, except for Illinois.
In Illinois, the DGA reportedly spent tens of millions of dollars in targeted TV ads to boost Republican candidate Darren Bailey, who eventually captured the nomination by a wide margin. Four years ago, the DGA used the same tactic to boost Illinois Republican gubernatorial candidate Jeanne Ives, too.
However, the DGA isn’t obligated to report its spending with the state because the ads don’t specifically implore voters to vote for any candidate, according to Illinois State Board of Elections Public Information Officer Matt Dietrich.
“Any voter can file a complaint with our board alleging that the DGA ads are in fact independent expenditures and should be reported as such. No such complaint was filed in 2018, nor has one been filed thus far in this election cycle,” Dietrich wrote in a July 11 email to Insight.
Although unreported, the DGA’s spending was still uncovered by several media outlets with the help of ad tracking service providers such as AdImpact.
Costas Panagopoulos, professor and chair of the Department of Political Science at Northeastern University in Pennsylvania, told Insight: “My sense is that this type of strategic activity has been going on for a long time. It just might be more transparent now, given the resources that we have to track spending.
“At the end of the day, it is the voters’ obligation to consider carefully the candidates they choose. And in that sense, promoting any specific candidacy should not dictate how individual voters vote.”
SPOTLIGHT
Hostile Neighbors
CONTAINERS BLOCK THE TIENDITAS International Bridge at the border between Colombia and Venzuela in Cúcuta, Colombia, on Aug. 8. In 2015, socialist Venezuelan President Nicolás Maduro shut down border crossings with Colombia after years of deterioriating relations with conservative Colombian administrations.
PHOTO BY EDINSON ESTUPINAN/AFP VIA GETTY IMAGES
PHOTO BY JUSTIN SULLIVAN/GETTY IMAGES
Long beach, calif.— Michael Clifford works for a trucking company in Utah but spends much of his time making deliveries in California.
As a nonresident company employee, Clifford said he isn’t happy with California’s new labor law—Assembly Bill 5 (AB 5)—that was approved and signed into law in 2019 and took effect last month after a failed legal challenge.
The new law requires independent truck owner-operators—some 70,000 strong throughout the Golden State— to be classified as employees, with few exemptions.
“The owner-operators run on a tight profit margin. Everybody thinks they make a lot of money, but they don’t,” Clifford said, while standing in line at a transportation logistics company near the Port of Long Beach on July 26.
The way the new law is written, he said, AB 5 likely will do more harm than good to the state’s trucking industry.
For starters, it will create “all kinds of problems in the supply chain, the food supply chain,” amidst a nationwide shortage of truck drivers, Clifford told Insight.
“What we do here will affect the food supply in another country. It’s very connected,” he said.
On June 30, the Supreme Court declined to hear a challenge on whether AB 5 violates the Federal Aviation Administration Authorization Act of 1994 regarding truck owner-operators.
The court’s refusal to review the case removed a legal hurdle allowing the law to move forward in California, sparking protests across the state. The California Trucking Association likened the situation to pouring gasoline on a fire.
“In addition to the direct impact on California’s 70,000 owner-operators— who have seven days to cease long-standing businesses—the impact of taking tens of thousands of truck drivers off the road will have devastating repercussions on an already fragile supply chain, increasing costs, and worsening runaway inflation,” the association said.
Jason Rabinowitz, president of Teamsters Joint Council 7 in Northern California, told CBS that the new labor law is about unionizing independent truckers and correcting worker classification. Independent truck drivers gather to delay the entry of trucks at a container terminal at the Port of Oakland, during a protest against California’s law AB 5, in Oakland, Calif., on July 18.
“Every worker, every driver deserves the right to have a union and all the benefits that come with that,” he said.
Law Sparks Protests
Owner-operators protesting AB 5 at the Port of Oakland managed to shut down operations for a week in July, prompting the city to file a suit against the truckers.
In a July 21 letter regarding the protest, the port’s executive director, Danny Wan, said his office would continue working to address the concerns of the truckers to end the blockade.
“I understand the frustration over AB 5,” Wan said. “We hear you. We have heard you since day one of your protest action.
“We support your first amendment right for a peaceful demonstration. However, as we discussed, even before your demonstration began, the supply chain locally to globally was already congested.
“We do not want to see the loss of business and jobs here.”
Northern California’s Port of Oakland is a major economic engine for global trade, “and we want to keep our jobs here,” Wan added.
Truckers Sound Off
“More taxes, more revenues for the state, huh?” Jose Guzman, a company truck driver, told Insight while waiting to receive his papers at Three Rivers Trucking in Long Beach, California, on July 26.
“I have a couple of family members who are owner-operators,” he said. “I know they work here out of port. It seems crazy.”
Another truck driver who wished to remain anonymous said the labor law
would devastate California truck owner-operators.
“Every individual who has just purchased, or is paying off their truck, pretty much can’t work anymore,” he told Insight.
“As an owner-operator, you’re kind of on your own. If it continues, what I’m thinking is people are going to start leaving California.
“You know what’s hard about that? They’re affecting an industry that’s for the state—for everyone. The thing is ... I don’t think anyone is financially ready to stop working to set the [new] standards.”
Another company truck driver waiting for an oil change in Long Beach feared a surge in price inflation if the law were to remain in effect.
“It’s going to increase everything if they shut the truckers down,” the trucker told Insight on condition of anonymity. “Prices are going to go through the roof,
Francisco Gonzalez, truck driver
Michael Clifford, truck driver
and it’s wrong. It’s totally wrong. It’s stupid for them to do that. This is America—c’mon, people. Common sense.
“Who do you help by doing this? What’s the purpose? We need goods moved around. There’s no way around it. If you create a law, make it for the people, not against the people. Why would you try to destroy families?”
According to California’s Employment Development Department (EDD), an “ABC” employment status test, which went into effect in January 2020, defines if a worker is an employee or an independent contractor in California.
“A worker is considered an employee and not an independent contractor unless the hiring entity meets all three conditions of the ABC test,” according to the EDD website.
These conditions include that a worker proves he or she works independently, performs the work outside the hiring company’s regular business, and routinely works in an independently established trade.
At the Long Beach Travel Center truck stop, Efraim Lara, owner of Lara’s Transportation in Carson, California, said he isn’t happy about the prospect of losing his business and the freedom to set his schedule.
“I don’t feel good because it’s going to be hard for us. I’m the boss. I don’t want to [go] back to [reporting] to a boss. I don’t want that,” Lara told Insight.
Francisco Gonzalez, owner of F.J. Trucking Services in Palmdale, California, said what concerns him is the potential loss of flexibility as an independent owner-operator.
“I’m not going to have the same freedom,” he told Insight.
“They’re trying to make us get rid of our trucks at a certain point—as they did before when they changed for the air quality. I had to give up my good truck and get a new truck—this one I paid off last month for $95,000. “
Gonzalez said he logs between 1,000 and 3,000 miles on his 2015 semi each week based on the job. An owner-operator can earn anywhere from $120,000 to $150,000 annually, “depending on how hard you work,” he said.
“Right now, I can do my own time. I work when I have a chance. If I want to work more, I work more; if I [want to]
work less, I can work less. It’s going to be my schedule.”
His Own Boss
Under AB 5, Gonzalez said he could lose all that.
“We just got to keep fighting,” he said. “We have the right to be independent. I will have to sell the truck, and [a company] will have to hire me. I won’t be making the same money [that I am making] as an independent. When the big companies hire you back, they’re going to pay you less.”
Titus Jones, owner of D&W Trucking in Inglewood, California, took the opposing view, saying he supports AB 5, given the amount of cheating that goes on among truckers operating under the legal “umbrella” of owner-operators.
“It’s a serious problem because when you see legitimate companies—family businesses that have been in business for years—you have trucks sitting on the side,” Jones told Insight.
“The American dream is generating your income. When you purchase a truck, you’re going after the American dream. When you’re chasing the American dream, and you’ve got a lot of cheaters interfering with that, then you feel this isn’t right. How is this working?”
Company trucker Alex Velasco said that while the new labor law doesn’t affect him, he thinks it will “cause more harm to owner-operators.”
“They’re going to have to pay W-2, and that’s going to cost more money for the owner-operators,” he said.
Unfair Advantage
Ron Caetano, a consultant for the Owner Operators Co-Op in California, said that “on the surface” AB 5 has shown that companies have tried to pay their employees 1099 self-employment wages to avoid paying normal wages and benefits.
“That’s unfair,” he told Insight. “The law says if I have an employee, I have to pay them W-2. The employers have been skating the law and brought [AB 5] upon themselves.”
However, Caetano said, the price inflation that many fear will result from fewer independent truckers on the road to transport products hasn’t shown up in the spot markets yet.
He said there also hasn’t been a resulting increase in shipping rates since the
70,000
BUSINESSES
THERE ARE AROUND 70,000 independent truck owneroperators across California.
Efraim Lara, owner, Lara’s Transportation
law went into effect either.
Caetano said this has more to do with the lessening of port congestion, as cargo ships redirect to ports along the Gulf of Mexico and East Coast, taking away business from California.
“There’s no work for the trucks on the spot market. It’s just not there,” Caetano said. “None of that freight has hit the spot market in California. We’re not seeing the inflation of what they’re predicting. Rates are still down—way down.”
However, all that could change if a mirror law known as the Protecting the Right to Organize (PRO) Act passes at the federal level.
The PRO Act would restore the right of workers to “freely and fairly form a union and bargain together for changes in the workplace,” according to the AFL-CIO.
Caetano said the PRO Act includes a similar ABC test provision that could reclassify thousands of owner-operators in the United States.
“Now, you’re talking hundreds of thousands of trucks instead of [tens of thousands of trucks] in the state of California,” he said.
The legislation was approved by the U.S. House in March 2021 and is currently pending in the U.S. Senate.
“Technically, 1099 is cash under the table—even though they’re reporting it,” Caetano said. “You’ve got to be able to look at it from both sides. You’ve got to be fair to the honest employers.”
Though AB 5 “levels the playing field for all carriers,” Caetano said, “you’re still going to have some who are going to try to cheat the system.”
“I’ve seen a massive change in the industry—for the worse. There are carriers out here just ripping off owner-operators [under cover of 1099]. What we did was decide [to] start a co-op. Technically, we’re just a bunch of owner-operators in one big organization.”
The trucker’s cooperative helps members pass the ABC test to continue working as owner-operators, Caetano said.
“All they’ve got to do is give us a call, and we get them running,” he said.
Clifford said AB 5 is a “huge deal” and isn’t good for free enterprise.
“I wish we could take the time to talk about what is true capitalism, because it’s not what’s [happening] in this country at this time,” Clifford said.
Perspectives
U.S. House Speaker Nancy Pelosi (D-Calif.) and Taiwanese President Tsai Ing-wen pose for a photo after Pelosi received the Order of Propitious Clouds with Special Grand Cordon, Taiwan’s highest civilian honor, at the president’s office in Taipei, Taiwan, on Aug. 3.
PHOTO BY CHIEN CHIH-HUNG/OFFICE OF THE PRESIDENT VIA GETTY IMAGES
MAYBERRY RED Huawei’s tentacles extend to the heartland of America. 44
She can respond with $4.5 billion in security assistance to Taiwan. 45 Greenfield FDI flows to the United States have dropped more than 90 percent since the 1990s. 47
