Contractor Balmore Hernandez to join restaurateur Nick Bovis, permit expediter Walter Wong in cooperating with feds’ case vs. Mohammed Nuru
Also: Woman charged with lying about gifting Nuru gold Rolex worth nearly $40,000 set to plead guilty
The United States Department of Justice today unsealed charges against Alan Varela and William Gilmartin, alleging that the Oakland-based contractors participated in bribing ousted Public Works boss Mohammed Nuru with a $40,000 John Deere tractor.
Fellow contractor and former Public Works employee Balmore Hernandez has agreed to plead guilty to this and other charges, and agreed to cooperate in the ongoing case against his one-time boss. All three contractors have been charged with a scheme to ply Nuru with gifts and/or discounted work in order to gain access to city contracts.
In a related case, Florence Kong, who owns a construction company and construction-debris recycling company with city contracts, has agreed to plead guilty to charges that she lied to investigators about gifting Nuru cash, costly meals, a gate for his Colusa County “ranch,” and a Rolex watch worth nearly $40,000. Unlike Hernandez, she has not agreed to cooperate in the case against Nuru.
Nuru was arrested by FBI agents in January, and faces up to 25 years in prison for an alleged bribery scheme as well as charges he lied to FBI agents. The Department of Justice also outlined a number of additional “schemes” for which it was not seeking punishment; rather these were included to “show state of mind.”
Germane to today’s announcements, in one of those “schemes,” Nuru was charged with reciprocating favors for contractors who performed hundreds of thousands of dollars’ worth of free or discounted labor on his ranch in Colusa County, while also bribing him with a John Deere tractor valued at more than $40,000.
Hernandez, who was charged in June, has since been revealed to be “CONTRACTOR 1” in the feds’ charging documents. Piecing together the allegations, it appears that Varela is “CONTRACTOR 3” while Gilmartin is “CONTRACTOR 4.”
Varela is the president of ProVen Management in Oakland, a civil engineering and construction firm he founded in 1991. Gilmartin is the vice president. Along with Hernandez, who founded AzulWorks in 2000 after leaving Public Works, Varela and Gilmartin are charged with bribing Nuru in a long-running attempt to gain control over an asphalt plant that was slated to operate on Port of San Francisco land at Pier 94.
Citing intercepted communications and financial transactions, the feds allege these bribes took not only the form of work on Nuru’s “ranch” — “built from scratch by contractors largely from San Francisco or the Bay Area” — and the now-infamous tractor, but “extravagant dinners for Nuru and Hernandez,” paid for on Gilmartin’s company card.
In the affidavit unsealed today, FBI Special Agent James Folger estimates Hernandez sunk more than $250,000 into work on Nuru’s dacha while Gilmartin paid more than $20,000 on meals.
Folger further charges that the tractor, valued in excess of $40,000, “was financed through one of Varela’s and Gilmartin’s companies along with other construction equipment, thereby indicating a business purpose rather than a personal one.”
The three contractors are purportedly delivered Nuru his tractor, telling him they listed the contact for delivery not under Nuru’s name, but under the first name of his girlfriend — Sandra — a purported attempt to conceal the nature of this gift.
Hernandez, Varela, and Gilmartin appear to have literally spelled out the nature of their plans with regard to leveraging Hernandez’s relationship with Nuru to land the asphalt plant deal.
On May 16, 2013, Gilmartin wrote an appreciative email to Hernandez, stating “I have used you to help negotiate this deal because of your ability to understand and present our proposal without making the other side nervous. For this you are entitled to ownership.”
In February of that year, Gilmartin wrote in an email that an $812.10 charge at Morton’s steakhouse was for “dinner with Mohammad [sic] head of DPW and Balmore Hernandez discussing asphalt plant deal.”
While Nuru was named in this communique, the affidavit says he was more commonly referred to as “our friend” by the three contractors. Going back to 2013, written communications between them and their friend indicate Nuru, then the head of the Department of Public Works, “was providing inside information on how DPW and the Port of San Francisco (“Port”) were approaching a Request for Qualifications/Proposals (RFQ-P or RFP) for the asphalt plant on Port land.”
As a result, the contractors had insight into both the city’s desires and the offerings made by would-be competitors. They also purportedly leveraged their relationship with Nuru to address requirements they felt to be onerous or disadvantageous.
Gilmartin also appears to have, again literally, spelled out that he understood the illicit nature of the arrangement with Nuru. From a May, 2014, email:
the back channels of negotiating are in full swing for the candlestick phase 2. I need to send a PDF file of the asphalt plant and concrete plant to [redacted well-known business person]. This will be done through back channels from Mohammad. [sic] Could you send again to me for the 10th time our proposal for the plants, a PDF file excluding the financial performas. [sic] This will be forwarded through various ways to get to him this am.
Just so you know there was a a [sic] meeting last night that figured out the left hand needs to work with the right hand and two hands are better the one!!! Please keep this information between you and me. All deals can blow up. Loose lips sink ships.
It’s not a done deal, keep your figures crossed this could be great for us
The affidavit alleges that Hernandez and Nuru coached Gilmartin on how to respond to questions prior to his appearance before a panel weighing the bids for the asphalt plant — even while, in communications between Varela and Gilmartin, they admitted that they did not have the qualifications or experience to run an asphalt plant, and were, to boot, short on funds.
And yet, by 2016, the Port Commission had formally adopted an exclusive negotiation agreement with Varela and Gilmartin’s joint venture; as Gilmartin had prophetically emailed one year earlier, “don’t worry … this is set up for us to win.”
Negotiations regarding the plant, however, stretched on for years. As did work on Nuru’s ranch. Lavish monthly or bi-monthly dinners at a San Mateo restaurant during which terms and conditions for the elusive asphalt plant were allegedly discussed and smoothed out continued “through at least early 2019 and likely later.”
The affidavit unsealed today also reveals that Varela was in contact with longtime city contractor and permit expeditor Walter Wong, who in June pleaded guilty to charges of fraud and conspiracy to commit money laundering. Wong — aka “CONTRACTOR 2” — is now cooperating in the case against Nuru.
Varela traveled to Chile in 2018, along with Wong, Nuru and Nuru’s girlfriend, Sandra Zuniga, on a trip the feds allege was “heavily subsidized” by Wong. Zuniga, who worked in the mayor’s office, was charged with money-laundering in June.
In February, 2019, the tractor was delivered to Nuru in Colusa by Hernandez and Varela, per today’s affidavit. Varela purportedly signed the invoice and told John Deere employees he was in a rush to get it delivered. It appears Varela also bought a cheaper tractor and had it delivered to his own residence in Napa.
Varela and Gilmartin are charged with bribery of a local official. The maximum sentence calls for 10 years imprisonment and a $250,000 fine.
Following Nuru’s January 2020 arrest, incidentally, Public Works and the Port scrapped their years-long plans for the asphalt plant.
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