Friday, November 20, 2009

Racial Politics, Internet Fraud & the "Mayor of West Oakland"

Also see - "Cannery: Black Panthers Strike Again"

West Oakland, internet fraud, and developers: a Lower Bottom scandal
Jonathan Bair | SF GATE
November 18 2009
[Thanks to Mister Mister for the lead]

Marcel Diallo

Today's East Bay Express tells the story of a fraudulent email defaming a West Oakland activist [entire story attached below], sent by another West Oakland activist. Earlier this year, an email purporting to come from Max Allstadt, a good-government and arts advocate who worked on live/work legislation among other issues, was sent to a variety of politicians and nonprofit leaders, using homophobic and racist language. Mr. Allstadt suspected the email came from a West Oakland entrepreneur named Marcel Diallo, whose grant request was spurned by the Community Development Block Grant Board, of which he (and InOakland's own V Smoothe) is an elected member. Several months and several lawyers later, Mr. Allstadt had strong evidence of the culprit, and told his story to the Express.

Marcel Diallo, who owns the personal internet account from which the defamatory email originated, earned a fair amount of local and even national renown for his drive to create a black cultural district in the neighborhood known as Lower Bottom (or, officially, Prescott - Oakland Point). Railing against hipsters and developers using racially-loaded language, Mr. Diallo sought to create a self-sustaining district of new homes and businesses marketed toward black professionals. Ultimately, however, his businesses failed, despite receiving almost a quarter of a million dollars in city grants, and he was bailed out by the area's largest developer, Rick Holliday of Central Station. The irony was not lost on East Bay Express reporter Robert Gammon, who wrote:

Indeed, records indicate that by late 2008, Diallo might have ended up on the street if it had not been for Rick Holliday. The local developer purchased Diallo's foreclosed home on Pine Street from Diallo's mortgage lender and then allowed Diallo to keep living there. Holliday also provided Diallo with inexpensive space in his nearby condominium development for the Black Dot Cafe. In other words, the black empowerment leader who had become one of the East Bay's loudest voices against gentrification is being propped up financially by a prominent white businessman from Emeryville.
You Don't Know Jack
By Robert Gammon
East Bay Express | Nov. 18, 2009

There's strong evidence that Marcel Diallo Jack, the self-styled "mayor of West Oakland," perpetrated a racist Internet fraud on a local activist.

Oakland activist and political blogger Max Allstadt was the victim of a vicious Internet fraud that could have happened to anyone. A scam artist set up a fake e-mail account, disguised as Allstadt, and then sent out an ugly e-mail full of racist and homophobic invective. Allstadt was stunned, but decided to fight back, and through a series of court-ordered subpoenas, he uncovered strong evidence that the person behind the fraudulent e-mail was Marcel Diallo, a well-known black-empowerment activist and self-styled "mayor of West Oakland" who was featured earlier this year on CNN.

Interviews and public records suggest that Diallo sent the fraudulent e-mail as revenge for a vote Allstadt cast while serving on a West Oakland city advisory panel. A nonprofit that Diallo controls had requested a $150,000 grant from the panel. Public records indicate that Diallo desperately needed the money after losing at least three properties to foreclosure. But Allstadt voted with a majority of the panel to turn Diallo down. After the vote, Allstadt said Diallo angrily confronted him and threatened him.

Determining who sent the fraudulent e-mail was anything but easy. The fraudster set up an e-mail account with Google under the name,, but the Internet giant refused to disclose the identity of the scam artist without a subpoena. So Allstadt, a carpenter by trade, borrowed some money, hired lawyers, and filed a libel suit against unnamed defendants. "Luckily, I had the resources that allowed me to borrow the money," he said in a recent interview. "If I hadn't, I would have had to just sit there and take it."

The information provided by Google revealed only that the fraudster had set up the e-mail account while using an Internet connection from Comcast. So Allstadt's lawyers subpoenaed the cable provider. But after being contected by Comcast, Diallo's attorney, Raymond Willis, intervened in the case in an attempt to block the subpoena, saying he represented Black Dot Artists, a nonprofit that Diallo runs out of his West Oakland home. However, the judge allowed the subpoena to go forward, and Comcast revealed that was set up using an account established and maintained by Diallo, according to legal documents provided by Allstadt.

Neither Diallo nor his lawyer returned phone calls for this story. But in court documents, Willis argued that anyone could have sent the racist e-mail because he said it came from a wireless account that's available to the public at Diallo's Black Dot Cafe. If true, then the wireless access also was probably available to others in the immediate vicinity. However, Google revealed that the person who set up the e-mail account did it at 2:47 a.m., so it likely didn't come from the cafe because it isn't open at that hour. In addition, the cafe and Diallo's nearby home are in a sparsely populated neighborhood, thereby severely restricting the number of people who could have used the wireless access — and known Allstadt. It also should be noted that Willis maintained in court documents that the Internet account belonged to Black Dot Artists, but the Comcast records showed that it was registered to Diallo, personally, at his home.

Moreover, public records raise serious doubts about Diallo's truth telling over the years, at a time when his various enterprises have been awarded at least $250,000 in city funds. For starters, the spoken-word poet's real name isn't Marcel Diallo; it's Marcel Diallo Jack. And for the past decade, records strongly indicate that the "mayor of West Oakland" has been living — at least part-time — in an apartment on the other side of town. Since 2000, he has been registered to vote at an apartment on Park Boulevard near Interstate 580, and county records show that he voted at a polling place just off Park in last November's election.

Public records also show that by the time that Allstadt and Diallo had their alleged run-in early this year, Diallo's financial world was crumbling. Among the three properties he lost to foreclosure by late 2008 was his sometime home on Pine Street near the Port of Oakland. Plus, according to court records, he had been evicted from his Park Boulevard apartment for failure to pay rent.

It was a startling turnaround for the West Oakland artist. At the beginning of the decade, he started buying up property in the far reaches of West Oakland. His plan was to establish a black-cultural district in the traditional "lower bottoms" neighborhood. "I think he was really trying to build up that part of the city," said City Councilwoman Nancy Nadel, who represents West Oakland and said Diallo and his friends have "an entrepreneurial spirit."

Over the years, Diallo has preached black empowerment while denouncing gentrification and railing against young white hipsters. Although some viewed him as little more than a divisive race baiter, his message drew followers, especially among artists, young progressives, and the city's black establishment. He was featured favorably in stories in the San Francisco Chronicle, the Oakland Tribune, and the East Bay Express. In 2008, Mayor Ron Dellums appointed him to the city's cultural arts commission. And this summer, he made national news when CNN profiled him.

But public records indicate that he never had the financial wherewithal to keep his fledgling black-cultural district alive. From 2004 to 2006, he purchased several West Oakland homes at the height of the housing boom. It soon became apparent that he couldn't pay his many mortgages, despite the financial grants he had received from the city over the years for after-school arts programs.

In 2007, mortgage lenders foreclosed on two of his homes after he failed to make his monthly payments. And a year later, he lost his home on Pine Street to foreclosure. But he was stubborn. Court records show that two of his lenders were forced to take him court in order to get a judge to legally evict him from their property. His landlord on Park Boulevard also sued him for eviction when he stopped paying his rent.

Indeed, records indicate that by late 2008, Diallo might have ended up on the street if it had not been for Rick Holliday. The local developer purchased Diallo's foreclosed home on Pine Street from Diallo's mortgage lender and then allowed Diallo to keep living there. Holliday also provided Diallo with inexpensive space in his nearby condominium development for the Black Dot Cafe. In other words, the black empowerment leader who had become one of the East Bay's loudest voices against gentrification is being propped up financially by a prominent white businessman from Emeryville.

As Diallo's fortunes plummeted, Max Allstadt's were on the rise. The young white activist had moved to West Oakland several years earlier and hooked up with a group of friends who were challenging the neighborhood's traditional black and progressive power structure. Allstadt's clique includes Sean Sullivan, who ran unsuccessfully against Nadel in the 2008 council primary, and Rebecca Schneider, a city employee who operates the blog under the pseudonym, VSmoothe. Allstadt himself is a guest blogger and frequent commenter on Schneider's site, (and also has posted several strongly worded criticisms of this reporter in comments at He also is politically active and won a spot last year on the West Oakland Community Development Block Grant board, which recommends financial grants to worthy nonprofits.

Allstadt's alleged clash with Diallo occurred in March of this year after the poet asked the block grant board for city money for his West Oakland urban farm project, Village Bottoms Farms. According to city records, Diallo's nonprofit requested a $152,000 city grant over two years. But at the March 14 meeting of the board, Allstadt and his friends instead voted to award city funding to an established urban farming nonprofit, City Slicker Farms.

In court documents, Allstadt alleged that Diallo was angry about the vote. "You're in trouble man, you voted against the people," Diallo said, according to a statement Allstadt filed in Alameda County Superior Court in an effort to obtain a restraining order against Diallo. According to Allstadt's filing, Diallo also said: "You're not going to be comfortable walking around your block. ... You're not going to be comfortable in West Oakland. I'll make sure of it."

Twelve days later, the racist e-mail was sent from Diallo's Comcast account to numerous people across the city, including local politicians, according to court records. Nadel told Full Disclosure that she received a copy. The e-mail was obviously intended to make people believe it came from Allstadt. Besides bearing his name, it mentioned the block grant board and It also mentioned "Mr. West Oakland himself," in an apparent reference to Diallo. It derisively referred to gays as "queens" and blacks as "sambos" and "jigaboos." It concluded by stating: "It's high time we Drained the Bay of Black People."

In an interview, Allstadt said he first learned of the e-mail when a friend phoned him about it. "My heart was pounding; I was shocked," he said. "I was also kind of scared. To be framed for being something that I'm not, especially living in a town that has ethnic tensions, it's potentially dangerous." Allstadt also was worried that the e-mail would destroy his reputation because it had been blind-copied to an unknown number of politicians and political activists.

Allstadt said he immediately suspected that Diallo had sent the fraudulent e-mail because of his block grant vote and their alleged confrontation. But it took months for him to uncover the evidence that points toward the 37-year-old Diallo. Finally, when he discovered that the e-mail came from Diallo's Internet account, Allstadt approached the Express to tell his story.

As for Diallo, his fortunes continued to nosedive after not receiving the grant. One bright spot came in May, when the Oakland City Council awarded him $50,000 to seismically upgrade his Black New World social club down the block from his Pine Street residence. The grant, however, appears questionable, considering that the building is a rusted, corrugated metal shack with at least one large hole in the side. As for Village Bottoms Farms, it's a gated vacant lot, and the only thing that appears to resemble a farm is a mid-size planter with some tomato vines in it.

In May, the state also placed a $13,125 lien against Diallo for failing to pay California taxes, county records show. And on October 30, two of Diallo's mortgage lenders recorded filings with the county, saying that they were going to sell two of his properties — the Black New World social club and Village Bottom Farms — at a foreclosure auction this week on the courthouse steps. It's unclear what will happen to the city's $50,000 grant if Diallo loses the Black New World to foreclosure, too.

No comments: