The Board of Supervisors voted 10-1 Tuesday to reconsider a city contract with Recology, two weeks after an executive from the waste management company was federally charged for money laundering and bribery following an alleged plot with ex-Public Works boss Mohammed Nuru to raise San Franciscans’ garbage rates.
“There’s been some discussion around this contract by several supervisors and in light of the new information,” Board President Norman Yee said Tuesday night. “They would like to entertain a motion to send this contract back to allow for more discussion.”
The contract, which was negotiated in February — before the federal charges alleging Nuru and Recology executive Paul Giusti colluded to raise collection rates — was set to pay Recology no more than $62.5 million between Dec. 1, 2020, and Nov. 30, 2026. On Tuesday, however, the contract was relegated to the Budget and Finance Committee with only Supervisor Sandra Lee Fewer dissenting.
A little less than two weeks ago, the Department of Justice charged Giusti for purportedly bribing then-Public Works Director Nuru by funneling more than $1 million to various nonprofit accounts that Nuru controlled. In the wake of Nuru’s January arrest, both the feds and the city controller examined funds placed in Nuru-controlled nonprofit accounts, which originated with Recology. Nuru used the funds largely to throw lavish parties that burnished his standing.
As Mission Local reported more than a month before the charge, during 2015 and 2020 two groups, Recology and San Francisco Clean City Coalition, fronted the majority of money found in a Parks Alliance fund that Nuru drew from — with the vast majority of the Clean City Coalition’s money, in fact, coming from Recology. During that time, the cost San Francisco ratepayers coughed up for Recology’s services jumped more than 20 percent — healthy price hikes that Nuru and Public Works lobbied for, and were later approved by a city board he had heavy influence over.
Recology has had a monopoly on hauling refuse within San Francisco since 1932.
On Tuesday, District 3 Supervisor Aaron Peskin briefly questioned Public Works Deputy Director of Financial Management and Administration Julia Dawson and the Office of Contract Administration’s Acting Director and Purchaser Sailaja Kurella regarding how the contract with Recology “got so far” in the first place.
Read all about Mohammed Nuru’s corruption chronicles
Dawson confirmed her team had sent an order of city rates to Nuru in 2017, who then appealed it to the rate fairness board.
Peskin asked her point-blank — since Dawson was involved with the rate process in 2017 — if she “believe[s] the rate has been compromised by what we have learned in the last few days?”
“No,” Dawson responded.
Kurella added that the contract was presented to the Budget and Finance Committee “without any information or knowledge of any other investigations that may have been occurring by any organization or government agency with Recology,” and that the office has not communicated with Public Works. At the time, the contract was formed because the office decided it “save[d] the city money” and incentivized the Department of Environment’s zero-waste goals, she said.
Supervisor Fewer emphasized that when the city budget was approved with a “positive recommendation,” it had “not heard the news about Recology.”
The only disagreement stemmed from which committee should review the contract. Fewer, though “happy” to send the contract back, argued that issue adhered more to the Government Audit and Oversight Committee instead of the Budget and Finance Committee, which she oversees.
Ultimately, though, Peskin decided against passing on the contract to the Government Audit and Oversight Committee. Further investigation and discussion will ensue.
“No justice, no peace,” Peskin said.