Archive for the ‘regulation’ Category



eMeg’s Tale of Woe About PayPal Expansion is Bull

Wednesday, September 8th, 2010

In a softball interview with Fox News  sycophant host Neil Cavuto last May, Meg Whitman explained what it is about the sorry state of things that made her decide that she must “refuse to let California fail.”

Said eMeg: “The first thing we have to do is, we have to streamline government.” And to make it easier for business to grow? “Well, the first thing you do is, we have got to streamline regulation.

“The permitting process, the competing agencies that try to regulate — we built a building in Sunnyvale for PayPal, two-and-a-half years to break ground. We had to hire three consultants to navigate the labyrinth of California regulations.”

Powerful testimony to the debilitating roadblocks plucky little eBay faced as it sought to build a new home for PayPal. It’s a story Whitman has repeated often – portraying it as one of the principal experiences that compelled her to get into politics.

There’s only one problem. It’s what Harry G. Frankfurt, professor emeritus of philosophy at Princeton, eMeg’s alma mater, calls “bullshit.”

Since at least one Calbuzzer covered land-use planning issues in Silicon Valley for a good part of his career, we knew this was a serious allegation against Sunnyvale. So we tried repeatedly to get clarification or comment about any of this from Sarah Pompei, Whitman’s spokeswoman, and from eBay and PayPal. Despite many, many phone calls and emails, we got nothing. Pompei so wants nothing to do with this story that she decided not even to return our calls with a “no comment.”

So let’s break down Meg’s fantasy, with what we were able to find out with some actual reporting:

First off, the folks at City Hall in Sunnyvale aren’t too happy about Meg slandering their building-permit process. Especially since the PayPal expansion wasn’t in Sunnyvale – it was in San Jose.

Sunnyvale Mayor Melinda Hamilton and City Manager Gary Luebbers, sound pretty pissed off. In an email to Hamilton, who asked him to track it down, Luebbers wrote:

“We have taken considerable time trying to ferret out this assertion. In fact our research shows absolutely no record of ANY contact with PayPal. I think she may have just pulled Sunnyvale out of thin air. PayPal is in San Jose. And that may have been the case there. This is very unfortunate in light of the significant effort we expend in being the best and continually polishing this image.”

But it wasn’t the case in San Jose either. In fact, in March 2008, Whitman commended San Jose in a speech she delivered at City Hall, saying:

Our partnership with the office of the mayor, the city council, the city staff and the office of economic development is a testament to San Jose’s status as a world class place to grow and operate a business. We could not be prouder to be one of the companies that was born in San Jose and stays in San Jose . . . The City of San Jose has always been extremely flexible in helping to anticipate and meet our rapidly changing needs. It’s been a tremendous partnership between the city and our company . . . So this commendation is truly one of the highlights of my career, having come out to join eBay in March of 1998. And I will never forget the honor.

“At least until I confuse it with something in Sunnyvale,” she might have added.

According to City of San Jose records, which Santa Clara County Supervisor David Cortese, formerly the vice-mayor of San Jose, got his hands on only after submitting a public records request, eBay submitted its preliminary review for a General Plan change (to alter the then-existing height-limitation in the North San Jose Industrial Redevelopment Area) on May 8, 2003.

eBay submitted its actual GP amendment change on June 2. A site development permit was submitted a month later, and environment impact review was circulated starting August 29 and by December 2, when the council considered GP amendments, eBay’s development permit was  approved.

For those who don’t follow city planning, Cortese explains: “It’s a huge deal to change the general plan. That’s the blueprint for how the city is going to be built out over a 10 to 20 year horizon.” eBay’s GP change sped through the process like grass through a goose.

Once the general plan had been changed, it was up to eBay (not the city or any state agency) to develop building plans for the project – adding to their existing facility to accommodate PayPal. eBay didn’t submit building, electrical, plumbing and mechanical plans to San Jose until March 2006; fire and haz-mat plans came shortly thereafter. After the typical process of submissions, review, resubmissions and sign-offs, eBay’s building permit was approved July 28, 2006 and the final fire approval was made August 21.

“I remember the hoopla more than anything,” Cortese recalls. “It was billed by the Economic Development Department as the fastest permit-approval of its kind in the history of the city.”

The charge that excessive regulation and bureaucracy held up the PayPal project? “It’s absolutely absurd,” Cortese said. “She personally came into the new city hall and said this is the finest management staff I’ve ever seen . . . With her, political expediency apparently trumps everything, including her past testimonials.”

Cortese, of course, is a Democrat, as was his father Dominic, a former Assemblyman who also served as a county supervisor. But these are pro-business, conservative Democrats who don’t take cheap shots at Republicans.

So for Dave Cortese, it’s no small thing to say of Whitman’s charge: “Obviously, these statements are totally inconsistent with her campaign spin that California is a bad place to do business. And they are offensive to all of us from San Jose who made things work and are now the brunt of her rhetoric.”

We don’t know how many consultants eBay hired. Frankly, who cares? And yes, the general plan change was submitted in June 2003 and the building permit was issued in July 2006. That’s not just two-and-a-half years – it’s three years.

And excessive regulations (and Sunnyvale) had exactly nothing to do with any of it.