Los Angeles Has New Chance to Enforce Its Arizona Boycott
The L.A. City Council sent a message last year when it boycotted Arizona over the state's law targeting illegal immigrants. But the purpose of a boycott is to do more than send a message. It is to do economic damage. And in that respect, the city's boycott has failed.
The city continues to do business as usual with Arizona companies. Aside from a single conference in Phoenix that LAPD officers were forbidden to attend, absolutely nothing has changed.
"It's easy to engage in the political theater of boycotts," says Chris Newman, general counsel of the National Day Laborer Organizing Network. "It becomes very difficult when you start talking about dollars and cents."
Immigrant activists say the council has one chance to redeem its credibility. In the next few weeks, the council will be asked to approve a $90 million contract with Honeywell to upgrade the computer systems at its sewage treatment plants. The fight is shaping up to be a real-life shit storm.
"The Honeywell contract is going to measure the City Council's resolve in following through with the position they've staked out," Newman says. "Honeywell is posing an unavoidable dilemma."
On one side are the immigrant activists calling for the contract to be rejected in the name of social justice. On the other is the Bureau of Sanitation, which argues that, without the Honeywell contract, the city risks allowing its sewage plants to fall into disrepair. That could result in the release of noxious gases.
"Any delays on this project would make some of our old system subject to violations," says Varouj Abkian, assistant director of the Bureau of Sanitation. "If a treatment plant fails because of a control-system failure, because of obsolete equipment, that makes us very vulnerable. ... You could have a release of digester gas, and quite a lot of fines."
Councilman Ed Reyes, who has been leading the charge for the Arizona boycott, is expected to argue against awarding the contract to Honeywell, based on the argument that the company is headquartered in Arizona. His staff has faulted city departments — including the Bureau of Sanitation — for not enforcing the boycott.
"The intent of the council was to have a direct economic impact on the state of Arizona," says Tony Perez, Reyes' communications director. "This was an opportunity for us to have that economic impact, and they chose not to."
There's one other player in this unfolding drama, and that's Emerson Process Management. Emerson is the current operator of the computer systems at the Hyperion Treatment Plant in Playa del Rey, the largest plant in the city and one of the largest in the country.
Emerson bid on the contract to upgrade all the city's sewage-control systems, and lost to Honeywell. So now Emerson is urging the council to enforce the Arizona boycott by rejecting the Honeywell contract.
The episode illustrates how business works in Los Angeles. The city is unabashedly liberal. Successful businesses understand that and find ways to use it to help themselves and hurt their competitors.
"This contract will result in city money enriching both Arizona workers and the Arizona state government," Philip Recht, Emerson's attorney, wrote in urging the council to reject Honeywell's bid. "This is precisely the type of situation that the City Council's policy is supposed to prevent."
Honeywell, however, has a response to the boycott threat. It argues that it is not an Arizona company.
"We are headquartered in Morristown, N.J.," says Bruce Anderson, Honeywell's director of external communications.
Indeed, Honeywell International is headquartered in New Jersey. Its CEO lives there.
But Emerson notes that when Honeywell bid for the work — long before the Arizona boycott started — it used a subdivision, Honeywell Process Solutions, with an address in Phoenix. Furthermore, several top officials from that subdivision, including the project manager, live in Arizona. Only now that the boycott has been raised as an issue is Honeywell backing away from the Grand Canyon state.
Not so, says Honeywell.
"The division that will be driving this work is based in Minnesota," Anderson says. "The manufacturing of the parts takes place in Texas. This job generates 80 jobs in Los Angeles."
If you really want to get picky, Emerson — which is headquartered in St. Louis — also has a presence in Arizona. Arnie Berghoff, Emerson's lobbyist, says the office there consists of "just a few people" who would "do no work on the Hyperion contract."
In the age of modern multinational corporations, this is a tricky question: What is an Arizona company? As Ned Beatty said in Network, "There are no nations. There are no peoples. There are no Russians. There are no Arabs." There is only "the multinational dominion of dollars."
There are no Arizonans.
The City of L.A. is absolutely no help with this, because it has not defined what is meant by an "Arizona company." The original boycott resolution referred interchangeably to companies "headquartered" or "based" in Arizona. Does that apply to Honeywell, or to Honeywell Process Solutions?
Honeywell has hired two top L.A. lobbyists, John Ek and Michael Gagan, to argue that it doesn't.
City Attorney Carmen Trutanich — apparently because he disagrees with the boycott — has dragged his feet in drafting an ordinance that would tighten the definition. In the absence of an ordinance, it's up to the council to figure this out on a case-by-case basis.
The movement to boycott Arizona is much broader than the City of Los Angeles, and it has had a deeply unfair economic effect on the state, argues Garrick Taylor, spokesman for the Arizona Chamber of Commerce.
"Boycotts exact a political agenda against people who had nothing to do with the passage of the immigration law," Taylor says. "There are Arizona businesses that have been hurt — in the tourism sector, for example — that are just trying to keep their doors open and make an honest buck, that had no bearing on the Legislature and governor's actions."
Honeywell echoes those concerns.
"Companies like Honeywell are getting caught in the middle of this issue," Anderson says, adding that Honeywell is "very much supportive of immigrants' rights."
In March, the Arizona Chamber of Commerce circulated a letter to Arizona Senate President Russell Pearce opposing five additional anti-immigrant bills.
The letter said Arizona businesses agreed on the importance of protecting the borders but that enforcing immigration law should be left up to the federal government.
One of the signatories was Timothy Mahoney, president of Honeywell Aerospace, a subdivision based in Arizona.