City, customer payments to Recology waste collection company spiked during period when it was contributing heavily to Nuru-controlled account 


Nuru’s boss was aware of his dodgy fundraising activities, report states

Before they formed Monty Python, John Cleese and Graham Chapman had a program called At Last, the 1948 Show. The joke: It was 1967.

No joke: Sometimes covering news in San Francisco feels like that. 

There’s a pandemic, an economic catastrophe, multi-front investigations into long-running and far-reaching corruption launched following the January arrest of erstwhile Public Works boss Mohammed Nuru, and a sprawling election — with the presidential race obscuring all of the above. 

By the time you can — at last — really begin to unpack a consequential development, the focus has often moved on to something else. Perhaps the focus has already shifted several times; there’s so much to pay attention to but it feels like our attention spans have never been shorter. 

So, some of you may have heard about a late September report from the city controller’s office outlining the systemic breakdowns that allowed Nuru to solicit entities with business before him to donate funds into Public Works-controlled sub-accounts at the nonprofit San Francisco Parks Alliance. Nuru was then able to redistribute those dollars as he saw fit. 

But most of you probably didn’t. The contents of an interstitial controller’s report about nonprofits and sub-accounts just doesn’t amount to a hill of beans in this crazy world. And the amount of money funneled into the sub-accounts between 2015 and 2020 — $993,000 — doesn’t amount to a hill of beans in this crazy city: As of 2017, the government spent $1.2 million yearly on toilet paper.

But that doesn’t mean what’s in here isn’t important. Far from it: The focus needs to be on the baked-in corruption and the debilitating effect it has on the city. That’s the problem, even if one needn’t pay all that much to play; the cost of doing corruption is, sadly, apparently one of the few bargains left in San Francisco.

 

As such, the controller’s report is narrowly focused on outlining a flawed system and suggesting methods of repairing it. It notes, by the way, that, had the Board of Supervisors adopted a 2009 Chris Daly ordinance it spurned by a 6-5 vote, unelected honchos like Nuru would’ve long ago been barred from soliciting donations to nonprofits to fund the city — proving, once again, we all should’ve listened to Daly more. And we probably would’ve, if he’d talked less.

Photo by Lydia Chávez.

And yet, in the course of 50 pages of noting details such as “Mr. Nuru was not required to file Form SFEC-3610(b),” the controller’s report does drop a few bombs — albeit subtly. It notes, on page 31, that Nuru’s direct boss, city administrator Naomi Kelly, “was aware of his solicitation efforts” to entice entities with business before him to put money into nonprofit accounts he could tap. It does this without acknowledging her by name. 

But the real shocker — and a potential window into where investigators may well be going with all this — came three pages earlier. It’s the breakdown of the sources of the money siphoned into the funds Nuru controlled at the Parks Alliance. And, wouldn’t you know it, 88 percent of the money comes from just two sources: $131,948 from Recology and $721,250 from the San Francisco Clean City Coalition, a nonprofit. 

But wait: In the footnotes, it reveals that, during the five-year window of this probe, Recology — which has enjoyed a city charter-enshrined monopoly to haul San Francisco’s waste since 1932 — gave $630,000 to Clean City. In fact, in 2019 alone, Recology donated $180,000 to Clean City, which then turned around and paid $171,000 to the Parks Alliance.

So, Recology is a huge source of the money that trickled into Public Works’ subaccounts with the Parks Alliance. And Public Works is pivotal in setting Recology’s citywide rates.

Because, coincidentally or not, during the five years analyzed in the controller’s probe — during which Recology was funneling money into Nuru’s preferred subaccount — the amount you pay for Recology’s services went up some 20 percent. 

With the staunch backing of Mohammed Nuru.

Click for larger version.

Recology characterized its decade of donations to Clean City and the Parks Alliance to Mission Local as being “in support of their efforts to clean, beautify, and expand access to the City’s parks and public spaces.” 

These donations, the company continued, are “only a small part of Recology’s record of giving to organizations throughout the City.” 

Fair enough. But the lion’s share of the money funneled into what amounted to a Nuru slush fund stems from Recology. Whether this money was, as Recology claims, donated benevolently to clean up this city — or if everyone’s approach was more transactional — has not yet been determined by an outside party.

What has been determined is that, during the period these donations were being made, Recology’s customer fees spiked. They were hiked by 14.4 percent in 2017, another 5 percent last year, and a 1 percent rise in 2021 is anticipated. These prices were approved by a city rate board — which unanimously approved the rates suggested by Public Works and Nuru

So, we’re no longer talking about mere hills of beans here. Additionally, In 2019, the city approved upping Recology’s contract from $40 million to $48 million. In June of this year, the city proposed raising it again, to $53.5 million. 

Clean City did not return our messages by press time. The Parks Alliance said, via statement, “We had no prior knowledge, did not benefit in any way, nor had any control over the donations that Nuru and Public Works solicited and directed to the sub-account, as the report states.”

Recology added that, after its leaders learned local and federal investigators were probing both these organizations, they “pledged full cooperation with all government investigations and strengthened employee training to ensure it addresses applicable ethics rules.” 

Well, good. Based upon what we already know, it’s hard to imagine that serious questions won’t be asked and documents won’t be demanded — if that hasn’t happened already. 

Former Director of Public Works Mohammed Nuru. Photo by Lola M. Chavez.

But, as the city continues to investigate, perhaps it ought to keep a closer eye on the reflection in the mirror. In the course of five years, Recology gave hundreds of thousands of dollars to the Clean City Coalition, which acted as a conduit to the Nuru-controlled subaccount at the Parks Alliance. But, in that same timeframe, Public Works gave Clean City far more: $3.3 million. All told, between 2016 and 2019, San Francisco gave Clean City $5.2 million. 

It seems Nuru was, in essence, siphoning city funds to his chosen recipients in a scheme that resembles money-laundering. It’s as if the bartender stepped out and Nuru began pouring everyone beers: Drink up, everyone! It’s on the house! 

It remains to be seen how many petty atrocities will capture and lose our attention before we potentially receive definitive answers to all our questions here. But, God willing, that day will come — at last

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Joe Eskenazi

Joe was born in San Francisco, raised in the Bay Area, and attended U.C. Berkeley. He never left. “Your humble narrator” was a writer and columnist for SF Weekly from 2007 to 2015, and a senior...

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13 Comments

  1. Recology spreads their money wide. In 2016, Recology donated $4,000 to The League of Pissed Off Voters. But why would @TheLeagueSF even take their ???

  2. Ahh…
    Was wondering when the Garbage Mafia would find itself in this story.

    There used to be a thing called the Colma Dump as a repository for our trash.
    Open to the public.

    One inched along behind a long line of refuse carrying vehicles up the slopes of San Bruno Mountain along a rutted road ending up at a little guard shack.
    Manning this position was a big Beluga with the most dour/serious expression possible.
    Hard to forget that face.
    He’d peek in and give everyone in the pickup cab a serious once over.
    Then take a quick look at the load and pronounce – 20.
    On a bad day with more or less an identical load – 40.
    Quickly cough up the requested cash – debating the price was not an option.
    No receipt – move along.

    In the rear view mirror, as Mr. Beluga turned away from the line of customers, he’d pull out a humongous roll of cash from his pocket and add your remittance to the bundle.

    Curiously, Mr. Beluga bore a striking facial resemblance to Michael J. Sangiacomo – President and CEO of Recology since 1990. And before that – Chief Financial Officer right around the time of my story.

    Was that little shack on San Bruno Mountain his office?

  3. May want to investigate how money is spent on those SFPUC “green projects”. Holloway cost $7.4M to do 8 blocks while Ocean Avenue continues to flood every time there’s moderate rain fall.

    1. A “regular” curb extension (bulb-out) with no landscaping, rain garden, or street furniture costs $150k per corner (maybe more now). Assuming two bulb-outs per 9 intersections, that’s $2.7 mil just on bulb-outs. At San Francisco costs, it’s easy to believe that replacing sewers, water lines, drainage, landscaping, street furniture, and paving would eat up the other $4.5 million.

      What you’re really asking is why do capital projects cost an order of magnitude more in San Francisco than anywhere else in the developed world? Unfortunately the answer is a lot more complicated, pernicious, and difficult to solve than corruption. There are myriad answers to the question, but all generally relate to the San Francisco Way. Generous benefits and salaries for public employees, prevailing wage requirements for contractors, poor contracting processes, and a host of other random requirements that companies who want to work with the city all have to meet (LGBT protections, paid leave requirements) that all drastically shrink the pool of companies that meet these requirements, and drive up their labors costs (and allow them to set higher costs).

      What you need to see are investigations into questions like: what’s more important, that a tiny group of rent seeking construction contractors or SFPW employees get paid generous wages, or that the whole population of SF benefit from cheaper capital projects which would free up funding for more projects than the city could construct otherwise? Why do SF progressives demand that private companies fulfill the social obligations that governments should be responsible for, driving up costs for everyone (including housing construction costs, which raises housing prices, which necessitates even more generous wages – and continuing in a terrible, expensive negative feedback loop)?

  4. Recology donates to numerous non-profits that work with the City. These donations weren’t a secret. It’s also a progressive, cutting edge, employee owned, union company that pays a living wage, with healthcare and pensions to thousands of blue collar people in San Francisco, and the Bay Area.

    Go ahead and tear them down… and replace them with Waste Management, or another publicly traded company? Goodbye living wages, benefits, progressive recycling and composting programs, etc.

    Oh… and San Francisco’s garbage rates are cheaper than Oakland, Berkeley, Alameda and San Jose.

    1. Not sure what you’re saying, here. No reason we can’t have both a corruption-free city and good companies with good wages. In fact the one should lend itself perfectly to the other. And I sincerely doubt Recology is going anywhere, anyway. So relax.

  5. What were the payments by Public Works & Other Departments to building contractors such as Webcor for?
    I can see why they would pay Recology & PG&E, but big commercial building contractors?
    I agree with Compost Kid. I have dealt with Recology for my workplace & my home; their decently paid union members do a great job.

  6. Joe,

    First time caller, long-time reader. I really appreciate your work and donate to both mission local and subscribe to your text service. With Joe Fitz moving to KQED, you are the last of a dying breed of hard hitting reporters.

    Unfortunately, I feel like this one misses the mark a bit. If there was information about Recology knowingly making donations into these slush funds, I could see the headline deserving that story. If you read the controller’s report, it sounds like the money was donated to one non-profit, then transferred to a second non-profit, which was the Park’s Alliance. From my POV, the story here is that Nuru had control of a Park’s Alliance account. How does that happen? Look at the Park’s Alliance board. Its got some very well connected people and some very high level professionals (accountants, attorneys, etc.). If this is happening at the Parks Alliance, it begs the question about what is happening at the numerous other non-profits in the City.

    Ultimately, the controller report concludes that the real issue is the policies surrounding the “friends of” organizations and Nuru using this account to subvert city purchasing policies. It even sounds like the expenses went to their intended purpose. I am not sure how you connect these issues to Recology? I get that they are an easy target but I don’t see enough here to justify the headline.

    Thanks for your hard work. I sincerely appreciate you but wanted to pass my feedback along as it’s something I am following closely.

    1. The headline and content are right, true, and fair. Nothing at all wrong with this very informative piece.

    2. Excellent observation, BigFrisco.

      Thank you, Joe Eskenazi, for this very informative summary. You state, “the cost of doing corruption is, sadly, apparently one of the few bargains left in San Francisco.” The purposefully circuitous nature of that bargain can be seen in the fact that the nonprofit San Francisco Clean City Coalition was getting a whole lot more out of the system ($5.2 million) than it was putting into the system ($721,250) — with $630,000 of that “donation” to Mohammed Nuru’s Park Alliance slush fund over five years actually coming from Recology.

      As you suggest, the real question here may eventually be to what extent the feds decide to hold City Administrator Naomi Kelly accountable for all of this as the “capo dei capi” in the racket that is city government.

  7. Kind of doubt Nuru was like, “Hey can you donate to my slush fund.”

    Unlike when he lent Breed money to “fix” her car.

  8. Has Naomi Kelly been asked about this egregious money laundering Nuru scheme? Or Breed? Thanks for keeping up the good work on this. I do fear with a global pandemic and no stop Trump antics that this will all be ignored along with the DHR fiasco.

  9. Thank you Mission and Local I’ve always love you for using that graphic of Rini Templeton’s, and now congratulate you for finally getting to Recology with their crazy corrupt overcharging of the last several years! Soon as I get that refund you’re getting a percentage of it thank you Mission Local!

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