California cities are trying to shun the companies that build Trump’s wall.

California Cities Are Trying to Shun the Companies That Build Trump’s Wall

California Cities Are Trying to Shun the Companies That Build Trump’s Wall

Moneybox
A blog about business and economics.
Aug. 9 2017 6:45 PM

California Cities Are Trying to Shun the Companies That Build Trump’s Wall

CBP-Conducts-Aerial-Patrols-Over-El-Paso-Sector-Of-USMexico-Border
A section of existing wall between Mexico and New Mexico.

John Moore/Getty Images

Overmatched in Congress by gerrymandering, rural bias, and clustering, blue cities and states have little power in Washington to stop President Trump’s border wall.

Henry Grabar Henry Grabar

Henry Grabar is a staff writer for Slate’s Moneybox.

Back at home, however, they issue billions of dollars in procurement contracts to some of the same construction companies that are bidding to build the wall along the U.S-Mexico border. Maybe it’s there, politicians reason, that they could make their voice heard.

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On Tuesday, the Los Angeles City Council voted to draw up a law to require firms bidding for city contracts to disclose their role in the border wall. Oakland and Berkeley have already said they will not do business with companies involved in design and construction of the wall. Similar efforts have been proposed in San Francisco and New York, and California state legislators have taken aim both at contracting with companies who work on the wall and using state pension funds to invest in them.

The first question that has to be asked about these efforts is: What wall?  Trump’s signature promise hasn’t exactly been coming along as planned. In May, after a rushed bidding process characterized by being open-ended in some ways (the wall should perhaps have solar panels, the president said) and extremely specific in others (the wall must be transparent so Americans can’t be hit by 60-pound packages of drugs, the president said), DHS announced a group of finalists had been selected.

But in July, the Trump administration said that a planned showcase of prototypes from those finalists had been postponed, after a complaint about the bidding process from the Penna Group, a Fort Worth, Texas-based contractor. Michael Evangelista-Ysasaga, Penna’s chief executive officer, told me that his company’s bid had been rejected because the government misunderstood the terms of the paperwork. “Any time there’s a rush, mistakes are made,” Evangelista-Ysasaga says.

The wall model display in San Diego that was supposed to be under construction by June has now been delayed twice, first to the end of the summer, and now until November.

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Meanwhile, a leaked transcript of Trump’s January phone call with Mexican President Enrique Peña-Nieto revealed that the commander in chief was not nearly as determined to have Mexico pay for the wall as he had been on the campaign trail.*

With all that in mind, threats from local jurisdictions may not be the preeminent hold-up for the wall. If the project goes forward according to Trump’s promises (which it won’t), it would constitute one of the largest nonmilitary contracts in the United States. Senate Democrats say the wall would cost $70 billion to build. Probably worth the cost of being shut out of California procurement, in other words.

Still, the outrage around the wall has been successful so far in dissuading several high-profile companies from participating in the bid process. When the bids are finally revealed, the opprobrium could stick to some of those companies in ways that extend beyond what’s prescribed by local or state law. When it comes time for blue states to award corporate subsidies, for example, firms might find their enthusiasm for the wall becomes a political liability.

The gestures are reminiscent of the movement to divest from private prison companies. New York City’s pension funds decided in May to sell stock and bonds in a trio of prison companies. Architects have also moved to stop their peers from designing prison projects.

Unfortunately for municipal legislators, the problem with the wall (which, again, won’t happen) is that the profit motive is so large, it’s probably worth forfeiting your company’s right to supply steel to California public works projects. Another reason why this border-spanning, solar panel-encrusted nightmare won’t quite die yet.

*Correction, Aug. 10, 2017: This post originally misspelled Enrique Peña-Nieto’s last name.