So What If Joe Mamo Made $788 Million?

Attempts to curb a Washington, D.C., gas station mogul raise issues of money, power -- and race.

Joe Mamo (The Washington Post/Getty Images)

When he was a 13-year-old braving northern-Midwest winters, Eyob "Joe" Mamo couldn't have imagined that he would someday control a mini-empire of gas stations on the East Coast.

In 1981 Mamo's father, Yenberber Mamo, who owned the Mamo Kacha bus company in Addis Ababa, sent Joe to a North Dakota boarding school to protect him from the communist regime that ruled Ethiopia. Now the commercial success of Joe Mamo, 44 -- founder, owner and CEO of privately held Capitol Petroleum Group, which controls 42 percent of Washington, D.C.'s gas stations -- is being questioned.

Mamo buys gas from oil refiners and sells it to the operators of the stations that he owns. A few of those operators say that Mamo has hiked their rent, the gas-delivery price and gas prices -- driving away potential consumers. District residents always complain that they pay more for gas than in the suburbs because of a mix of station location, taxes and other expenses. On Oct. 3, the street prices of a gallon of regular gas in the District and in adjacent Bethesda, Md., and Arlington, Va., neighborhoods were mostly comparable, with gas at $3.31 to 3.89 in Arlington and $3.05 to $4.29 in the District.

In response to the operators' complaints, D.C. City Council member Mary M. Cheh has sponsored antitrust legislation against Mamo's business "to break up what some members call a near monopoly of the local gasoline market." 

Cheh says there will be increased competition in the District's retail gas market if fuel wholesalers, who would still be allowed to own retail stations, are prohibited from operating the stations or collecting the income associated with gasoline sales. But the Washington Post reported recently that the proposal has hit a solid wall.

The proposed law strikes at the heart of Mamo's business and bothers his supporters. Consequently, in a city where there is a dearth of sizable black-owned businesses, the attempts of Cheh, who is white, to persuade at least seven of the 12-member D.C. Council to support her potential law failed. The Post said that was "because of growing skepticism from mostly African-American council members concerned that the bill unfairly targets a successful black entrepreneur."

In an interview with The Root, Mamo said, "I broke through a racial barrier by becoming a fuel distributor for Texaco, Exxon and Shell, and there are fewer than 10 black distributors nationwide. The law that Cheh proposed also does not exist anywhere else in the United States, and we contend that it is unconstitutional."

The Beginning

A Washington City Paper article reported that Mamo first worked in a gas station while he was a community college student. His entrepreneurial impulse emerged in 1987, when, with his savings and father's help, he bought his first D.C. gas station. Over two decades, Capital Petroleum became one of the area's largest motor fuel distributors, transporting gas from the refiners to the station operators.

Along the way, Mamo bought, leased or built gas stations, in effect supplying fuel to the stations that he owns but that others manage. Then, in 2009, as oil companies sold off company-owned retail stations, he joined a host of other entrepreneurs who wanted to buy those stations. Between April 2009 and December 2010, Mamo worked with the advisory firm Petroleum Capital & Real Estate LLC and bought 211 Exxon and Shell stations. Most are in the District and northern Virginia, but 71 are in New York City.