After he was forced into a last-minute recusal from a San Jose City Council vote in February, Vice Mayor Chappie Jones liquidated most of his stock holdings. But he’s holding onto a handful of lucrative stocks, including a controversial one.
Jones told San José Spotlight that of the 40 stocks listed on his public disclosure forms, he now only has holdings left in eight companies: Tesla, Snowflake, Amgen, Activision, Abbott Labs, Service Now, Berkshire Hathaway and Palantir Technologies.
“I didn’t anticipate any conflict (with them),” Jones said.
Palantir, a data-mining company developed by billionaire Peter Thiel, has been a lightning rod for public outrage.
In 2018, protesters marched outside the company’s Palo Alto headquarters to protest Palantir’s work for U.S. Immigration Customs and Enforcement. Palantir received tens of millions of dollars from the federal government to maintain a system that gave immigration officials a wealth of data on potential deportation targets, including information on their education, relationships, biometric traits and home address.
Privacy advocates have also raised concerns about Palantir’s business relationship with Santa Clara County. In 2015, the county announced that the company would provide software and related services for Project Welcome Home, a six-year program led by Abode Services to provide homeless housing and clinical services.
Palantir offered similar services to Partners in Wellness, a Santa Clara County program that identifies severely mentally ill people and assists them with more effective treatment. Palantir’s contracts for both programs are set to expire at the end of December 2022.
“I’m not sure how much Jones knows about Palantir’s products, business model or customer base,” said Ethan Gregory Dodge, founder of the Citizens Privacy Coalition of Santa Clara County who writes a monthly column on surveillance and tech for San José Spotlight. “Regardless, I feel that San Jose residents should be concerned that the vice mayor is increasing his wealth by investing in a company with a track record of human rights violations that have aided in the deportation of who knows how many innocent immigrants.”
Asked why he invested in Palantir, Jones said he liked its business model.
“I really don’t have any issues with the company doing business with the federal government,” Jones said. He added that he didn’t see any potential conflicts of interest in any of his investments, but that he would recuse himself from a vote or liquidate his stocks if one arose.
As an example, he pointed out that he liquidated his investment in Switchback Energy Acquisition Corp. after it purchased a company called ChargePoint that produces charging stations for electric vehicles. The vice mayor said it could conflict with his future council work.
“I liquidated (it)… for the very reason that in the future we might make charging stations and land use decisions,” Jones added.
San José Spotlight first examined the City Council’s stock holdings after Jones and Councilmember Pam Foley abruptly recused themselves from a vote on hazard pay for grocery workers. Jones owned stock in Amazon, the parent company of the Whole Foods grocery chain, while Foley owns a mortgage company where Amazon stock factors into the employee benefits plan.
City Attorney Nora Frimann told San José Spotlight the incident with the Amazon vote was an anomaly.
“Normally there would be a staff report that would accompany something like that, that would identify what businesses would be impacted and those kinds of things,” Frimann said. She added that her office normally goes through city contracts and lets councilmembers know if there’s a publicly-held company involved so they can review their stock holdings and decide whether they need to recuse themselves or liquidate their holdings.
Frimann said she didn’t know whether the city has ever conducted an audit or study to examine whether any councilmembers have committed conflicts of financial interest in their votes.
Oversight of what councilmembers own is minimal, and individual members are expected to check their own stocks to avoid conflicts, according to Rachel Davis, spokesperson for Mayor Sam Liccardo.
“If a matter coming to council involves a publicly-traded company, the council is advised of that fact,” Davis said in an email. “The councilmembers are responsible for determining whether they own stock in the company – the city doesn’t keep track of their investments.”
Aside from Jones’ mass liquidation, there has been little change in other stocks held by councilmembers.
Councilmembers David Cohen and Dev Davis reported that nothing has changed in their stock holdings since April. Liccardo, who according to his April filing still owns stock in six companies, did not immediately respond to questions about changes in his portfolio.
Councilmember Matt Mahan, who doesn’t hold any stocks, clarified details about a consulting company he owned, North Star Strategies LLC. Mahan said he created this company to do consulting work after he left his company Brigade and before he took office in 2021.
“I did consulting basically on technology and philanthropic strategy,” Mahan told San José Spotlight.
The only income reported from North Star Strategies came from another pass-through entity called Whitfoot—apparently the surname of a Hobbit mayor from Lord of the Rings.
“I really can’t speak about who I did consulting for or the specifics of the work, it’s not public information and it was from before I was in office,” Mahan said. “But it had nothing to do with the city of San Jose or San Jose politics.”
Whitfoot, which manages investments and LLC assets, is operated by Tom Van Loben Sels, according to records filed with the California Secretary of State.
Sels is the founder and managing partner of Apercen Partners, a premier tax consulting firm that serves high-net worth individuals and has a history of working on real estate transactions for some of the most influential tech moguls in California.
A document for Whitfoot filed with the Secretary of State in 2016 listed as a manager Michael Polansky, the co-founder and executive director of the influential philanthropic group The Parker Foundation.