Mayor Sheng Thao declined to break a tie vote on a proposal to extend a contract with a company that provides security guards in City Hall and also happens to be tied to key figures named in an ongoing FBI investigation.
The proposed $8 million extension with ABC Security Services was stalled in July when it failed to get the five votes needed to pass. Thao could have played a decisive role but instead decided, ahead of Tuesday’s meeting, not to step in, as was first reported by the Oakland Observer and East Bay Times.
“I’m informed by the mayor’s office that the mayor is declining to break the tie vote on this item, therefore this item fails,” Council President Nikki Fortunato Bas said during the meeting.
The council decided instead to extend ABC’s contract for the same period of time, through June 30, 2025, except only on a month-to-month basis, and only for a total of $6 million. The council also agreed to give ABC Security over $3 million in outstanding invoices and backpay for continuing to guard city facilities between July and September.
ABC Security’s contract was originally awarded in 2018 and has been repeatedly extended. Meanwhile, other security companies have expressed interest in submitting bids to take over the work. With the resolution approved on Tuesday, the lifetime value of ABC Security’s contract will rise to $28 million, assuming the city doesn’t pick a new company for the contract before June 2025.
A politically connected company that was recently named in FBI subpoenas
ABC Security’s owner, Ana Chretien, has business ties to Mario Juarez, a Fruitvale businessman and political operative who is a central figure in the FBI investigation that led agents to search Thao’s home in June as well as the homes and offices of the Duong family, owners of Oakland’s curbside recycling company California Waste Solutions. Juarez and another person named in FBI subpoenas, Julie Wedge, lobbied on behalf of ABC Security two years when the company was at risk of not having its contract renewed, according to public records obtained by The Oaklandside.
None of this came up in conversation at Tuesday’s council meeting, where councilmembers were more concerned about next steps in the bidding process for a new security contract.
Derin Minor, acting Assistant Director of Public Works, told the council that security firms are expected to turn in proposals near the end of October and he expects a new contract could be awarded in the first quarter of 2025 or “hopefully sooner.”
Minor also said that a report prepared by staff earlier this year gave an inaccurately high number for the city’s budget for security services. Minor said the budget was reduced to $4.9 million from $7.4 million because of the city’s financial shortfall, and the city had to cut guards from City Hall and eliminate a metal detector. Minor said OPW staff plan to meet with representatives for departments that use security guards to figure out how to stay within budget.
“We’re still reviewing other enhancements we can do or efficiencies we can find,” Minor said. “But we’re pretty bare boned right now.”
Councilmember Janani Ramachandran asked why staff considered giving the contract to a different firm, Allied Universal Security Services, in early 2023, but then changed their minds. Minor explained that a previous City Administrator had contemplated adding armed guards to the contract. He also said the city was going through a change in leadership at the start of 2023, and the item was pulled so that the new City Administrator would have a chance to consider the contract. But the process of evaluating the bids was further delayed when the director of OPW “resigned suddenly.”
“We’re just now getting this off the ground again with the RFP process,” Minor said.
Several councilmembers raised concerns about ABC Security workers not getting paid for several months. Minor assured councilmembers that once the contract extension is finalized the city will pay the company as soon as possible, likely in the next two to three weeks.
Councilmember Dan Kalb said he was alarmed that the city is contemplating hiring armed guards.
“I’m flat out against that,” Kalb said. “We’re asking for trouble there.”
Assistant City Administrator Harold Duffey said armed guards are only a “menu item” in the contract and the city isn’t obligated to hire them. Minor said this idea came up because the city currently employs police at metal detectors, and it was thought that private security could replace them.
“And the total cost of the contract is $28 million? Why wouldn’t we just give that amount to the OPD and have them man the doors?” said Councilmember Carroll Fife, who quickly clarified that she was joking.
Fife added that she was “deeply concerned” about the hiccups in the city’s process of awarding a new contract for security services, and with ABC Security going without payment for months.
“Hopefully this act of this particular resolution will get us where we need to be,” Fife said.