How Official Oakland Kept the Bey Empire Going 

The troublesome history of Oakland's most prominent Black Muslims -- and the political establishment that protects them.

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Carson says he was dismayed to learn that his name has been connected with Bey's case. Although he says he once offered a reference in support of Bey's efforts to secure a health-service contract from the county, Carson swears he never even knew about Bey's criminal history. "I wrote a letter for a specific usage, which was for a contract," he says. "I wouldn't be happy at all that he used it for some other purpose. This is the first time ever that I'm aware of any court-related activity on the part of Nedir."

Reid, who is now an Oakland city councilman, was livid when informed that his name was offered as a reference in a criminal case. "I have never offered a character reference for Nedir Bey in this way," he says. "When I see Nedir Bey, I'll have my words with him. I resent the fact that someone used my name without my permission. My father gave me my name, and I won't see it sullied. I am pissed. And when I see Nedir, Nedir will know that I'm pissed!"

The assertions of Carson and Reid cannot be verified because their letters are missing from the court record. But Bey claims, however diplomatically, that the two politicians stood by him. "I can understand a person not recalling writing a character reference or what have you eight years after the fact," Bey says. "The last thing I want to do is create division or animosity between people of goodwill and good faith -- black or white. Especially between black people. I would hate to have any type of discrepancies or disagreements between myself and the Honorable Keith Carson and the Honorable Larry Reid. I would only say that I have never used anyone, I have never forged any letters or anything like that."

Regardless of how it happened, just one year after Nedir Bey got off with nothing more than home detention, he received a magnificent gift from the city: $1.1 million in taxpayer money. Bey was the founder and chief executive officer of EM Health Services, which in 1996 asked for a $1.1 million city loan to build a business training nurses' aides and home health care providers to care for AIDS patients and other desperately ill people in low-income neighborhoods. The city just happened to have an ample fund ready to spend on such ventures: $50 million in cash from the Department of Housing and Urban Development, $22 million of which was to be disbursed by the city's One Stop Capital Shop to needy inner-city businesses rejected by traditional banks. The fund was specifically designed to revitalize struggling neighborhoods. Moreover, EM Health Services promised to make its money by giving comfort to the terminally ill -- an ancillary benefit that seemed to make the company an ideal candidate.

At first, some members of the city council had reservations. Councilmen Dick Spees and Ignacio De La Fuente worried aloud that Bey did not have enough collateral to secure the loan, noting that the family's bakery also owed $60,000 in back taxes. Although Your Black Muslim Bakery offered equipment allegedly worth $200,000 as collateral, city officials would later conclude that it was either worthless or already encumbered by prior liens.

But in the course of evaluating this loan, not one person in city government apparently asked why the city should lend $1.1 million to a man who just one year earlier had been convicted of a felony in which he allegedly tortured a man. The issue just never came up, according to Elihu Harris, who as mayor joined Spees, De La Fuente, and the rest of his council colleagues in approving the loan. "I don't know anything about it," Harris says. "I don't have any recollection of that. I'm not saying it didn't happen. But it was not a public issue, it was not raised by anyone I know." According to Mary Joseph, an employee of the city's Community and Economic Development Agency, the city's due diligence simply does not include checking for felonies. "It was not city policy at the time, nor is it currently city policy, to conduct criminal background checks on city loan applicants and their principals," Joseph wrote in response to a question by this paper. "Staff was not aware that Mr. Bey had pleaded no contest to a felony count of false imprisonment in 1995."

Joseph's department moved ahead with the loan in June 1996 -- and has regretted the decision ever since. Within months, city officials were complaining about how Bey was spending their money. By January 1997, agency employees and federal officials were questioning the following expenses: a $96,000 salary for Nedir Bey, $2,000 in cellular phone bills, $43,800 in consulting services, $12,600 for "security," $8,000 in "architectural fees," and $6,800 to lease a Cadillac Sedan DeVille for Bey's personal use -- although Bey later insisted that no city money was used to lease the car. Officials ultimately concluded that EM Health Services had spent $226,000 in excessive salaries and consultant fees in the second half of 1996 alone.

Meanwhile, Bey complained that the city wasn't disbursing the money fast enough. Although the city had agreed to pay the money in quarterly installments, officials soon realized that they had acquiesced before getting federal officials to sign off on the deal. After federal officials noted that Bey and the city had failed to complete all the necessary paperwork, Oakland chose to float Bey cash out of its own pocket -- albeit not as quickly as he wanted. As the city's cash flow slowed down, Bey started firing off angry letters to "the powers that be in Oakland."

"We have come to the conclusion that there are people in the city of Oakland that are deliberately trying to ruin our business and are doing everything in their power to see us fail," Bey wrote in one such letter. "Racism is not only people refusing to rent to you, or to hire you, racism is also when ... people can look at a business plan submitted by a non-black and feel that this person needs much more money to do what is in his business plan. However, when you ... look at the same business plan submitted by a black, you feel that this black person can do the same job, the same work, with the same results with much less money!"

Bey ultimately got the rest of the money, but it wouldn't do any good. Although EM Health Services claimed to be operating profitably by the first quarter of 1998, Bey never provided supporting documents, as required by the city. Bey apparently never submitted a financial statement after that, and the city declared EM Health Services in default in December 1998. When the city requested another audit, Bey refused to cooperate, according to a report to the city council.

On October 5, 1999, city staff paid a visit to the offices of EM Health Services -- but Nedir Bey was long gone. "Borrower had shut down his business and abandoned the premises without providing notice to the city," One Stop Capital Shop manager Greg Garrett wrote in a staff report, noting that the offices were now occupied by real estate agent Jamel Sultan. "It was noted that the phone system, executive cherrywood office furniture ... which were purchased from the loan proceeds, were at the premises. Mr. Sultan claimed that he had purchased the office furniture from the Borrower three months ago for approximately $1,000." In short, Garrett suggested, Bey had sold the furniture he had agreed to treat as collateral, taken computers and laptops that also served as collateral, and disappeared.

Bey dodges most questions about how he spent the money, claiming that he didn't misspend the money and that white bureaucrats quietly undermined EM Health Services with overly aggressive accounting. He denies secretly closing the business or selling the city's collateral, and he remains bitter about the whole affair. He claims that "white companies" like Granny Goose get all kinds of subsidies without micromanaging or henpecking. But whenever a black man comes for money, white city leaders either expect him to fail and withhold loans, or attach so many strings that failure is inevitable. "Dr. Bey was like a prophet then," Nedir Bey says. "He said, 'Brother, these people don't want you to succeed.' But me being a young black man, not having the experience of Dr. Bey, I'm thinking, 'No, these white folks in the city can't be that bad! They can't really want black people to fail!' That's exactly what they wanted. And that's exactly what happened."


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