It’s the Ides of March in the year 2021, and the fortune-cookie pejorative “May you live in interesting times” makes all too much sense.
What a thrill it is these days to know that, when a “biting incident” occurs at the White House, the culprit is the president’s rambunctious dog and not the president himself. What a thrill it is these days to hear about people getting shot at 24th and Capp streets and know it’s a vaccine site.
These are the less interesting times people have been craving. But as we pine for a return to normalcy, we’d do well to remember that, in San Francisco, the year 2020 was defined not only by covid but corruption. In January of last year, the feds arrested and charged erstwhile Public Works boss Mohammed Nuru in a bribery scheme — and, in the ensuing year and change, the dominoes continued to fall. To date, five department heads have been hounded out of office, three have been federally charged, and one pleaded guilty and has agreed to cooperate with investigators (more on that in a moment).
It remains to be seen, however, how thoroughly San Francisco will hold itself accountable — and how accountable it will be made to hold itself.
But whatever our new normal looks like, it will not be an outright facsimile of the past. Too many fires are now burning. Too many eyes are now looking. Too many shoes are yet to drop.
As such, your humble narrator has learned through multiple sources that the District Attorney’s office is interviewing employees of the Department of Building Inspection.
This is no small deal. A City Attorney probe in March, 2020, led to the ouster of DBI chief Tom Hui after it was revealed he had, for years, essentially turned over operation of the department to permit expediter and fixer Walter Wong.
Hui and Wong were, of course, waist-deep in the Nuru scandal. Hui purportedly “literally stood over people’s shoulders” to force out the controversial 555 Fulton Street project “sooner than it should’ve been done.” That’s the sclerotic development owned by Chinese billionaire Zhang Li — who allegedly gifted Nuru “some stone” and high-end liquor on a lavish Chinese junket arranged by Wong. Nuru purportedly pulled strings to advance this project too, and Wong — naturally — handled its permitting.
Mission Local learned that, in February, 2020, FBI agents visited the Department of Building Inspection after files for the 555 Fulton project vanished from the DBI’s computer system — and then reappeared.
So, that all happened. And, now, multiple sources tell us the DA is poking around in the building department.
The significance here is that, while the City Attorney deals in civil matters, the District Attorney brings criminal charges. The difference between a “gift” and a “bribe,” it seems, can be significant.
The DA’s office refused to confirm or deny that it was interviewing Building Department officials. As you’d expect.
It remains to be seen what cases, if any, are built against the building department. A little free advice to those involved, if you’ll permit it — get a criminal defense attorney, not a civil one.
The difference can be significant.
In October, Mission Local noted that the vast majority of the funds in Nuru-controlled nonprofit slush funds emanated from Recology. Nuru had an outsize role in determining the garbage rate paid by hundreds of thousands of San Franciscans — and, wouldn’t you know it, while this money was pouring into his slush funds, your garbage rate was jacked up by some 20 percent.
In November, the feds charged a former Recology executive, alleging that he and Nuru — with knowledge of Recology higher-ups — colluded to jack up those new garbage rates in a crass quid-pro-quo involving these slush funds and employment for Nuru’s son.
So, when City Attorney Dennis Herrera on March 4 gave the world a few hours to speculate what entity would be the subject of the “major development” in his office’s ongoing public integrity campaign — the smart money pointed toward the blue, black, and green bins.
Ding, ding, ding: Recology has agreed to reimburse San Franciscans some $95 million in the settlement announced by the City Attorney. The company omitted revenue when tabulating its 2017 request for a rate hike and asked for — and received — more than it was entitled to.
So, you’ll be getting a refund. Grand. But questions still abound: Mission Local has obtained a January 2019 email in which Recology reached out to the Department of Public Works’ former head of finance Ann Carey and its present finance head Julia Dawson and spelled out the discrepancy that led to San Franciscans being overcharged by scores of millions of dollars. (Recology has additionally claimed that it years ago informed members of the Department of the Environment — though it refuses to provide written evidence and the Department of the Environment denies this.)
This isn’t exculpatory evidence for Recology, which opted to continue charging the inflated rates for years until the City Attorney stepped in. Rather, it paints a darker picture, and spreads the blame wider — because it’s now clear that city officials knew San Franciscans were being overcharged, and nothing was done, for years.
Reached on the phone, Carey, now retired, declined to comment, and directed us to Dawson — who purportedly had the lead on this issue. Our calls and emails to Dawson were returned by Public Works spokeswoman Rachel Gordon. Her statement: “We are actively conducting an internal investigation into the Recology rate discrepancy, as well as cooperating with outside investigations into the matter, and have no further comment at this time.”
Fair enough. We’ll surely hear more later.
Some 160,000 San Francisco ratepayers receiving nearly $95 million by September is big news. But last week’s biggest development in San Francisco’s smörgåsbord of corruption may have been Sandra Zuniga pleading guilty to a long-running money-laundering conspiracy and agreeing to work with federal investigators.
Zuniga was the former head of Mayor London Breed’s Office of Neighborhood Services and the head of the city’s “Fix-It Program.” Yes, those are two different jobs — with a total salary and benefits of just under $225,000. Like Carson Daly, Zuniga was jarringly overemployed.
In addition to those jobs, Zuniga was also “GIRLFRIEND 1” in the charging documents against Nuru et al. She was the one who, on a wiretap, told Nuru “Don’t run your mouth. That’s what I’m saying,” and “Don’t tell a lot of people. That’s what you need to be careful of, because that’s what’s gonna get you in the end.”
So, it figures she’s heard some things. And seen some things: The $40,000 tractor Nuru was allegedly bribed with by a trio of contractors was delivered in her name. Bluntly, it also figures that Zuniga may be able to connect any dots for the feds that Nuru, for whatever reason, is unwilling to.
The Department of Justice last week noted that Zuniga’s money-laundering efforts traced back to “at least 2010.” That’s a lot longer than locals thought, and predates Nuru’s time atop Public Works. Zuniga had time to do lots of things and hear lots of things and see lots of things. There figures to be a lot of material for the feds to sift through.
Finally, Zuniga worked in the mayor’s office. If — and this is a big (and unsubstantiated) if — there’s anything that can trace back to that office, it figures Zuniga could well have been in a position to know something about that, too.
One more item. But you can handle it. It’s only wafer thin.
Last week, an independent auditor from the firm KPMG presented her findings to the PUC Commission, in which she stated that former Public Utilities Commission boss Harlan Kelly being hauled off by the FBI and charged in a bribery scheme constituted a “material weakness” in the department’s finances.
This conclusion wasn’t particularly well-received by the commissioners. That was a little odd. But it wasn’t the oddest thing: Auditor Lisa Avis noted that “PUC management determined there was no financial impact” of Kelly’s alleged corruption.
First, it would be nice to, say, audit that instead of taking PUC management’s word for it. Second, the cost of corruption is all too apparent.
As we wrote in December:
In San Francisco, the game is that contracts tend to go to insular groups of connected operators — and contractors unwilling to play this game do not find themselves on the winning end of bids, come what may. If an equity program intended to aid small and local businesses is debased, the obvious losers are honest small and local businesses. But that’s not all.
“The cost of corruption is not measured in the money allegedly exchanged between, say, Walter Wong and Harlan Kelly,” says construction management executive Ali Altaha. “It can be measured in: How much more is it costing taxpayers to build a project?”
Separate and apart from the competency and honesty of those receiving the contracts, in an artificially constrained pool of bidders, the cost of doing business goes up. “They’ll name their price,” Altaha says.
In a rather on-the-nose moment, at this very same meeting, the PUC Commission voted to accept hundreds of thousands of dollars worth of work done by the company AzulWorks.
It did this despite AzulWorks failing to provide the prerequisite and agreed-upon percentage of labor on the job to small and/or minority owned firms. AzulWorks was fined $4,700 for this — but still received nearly $700,000. That seems like a pretty sweet deal for them.
Even more on-the-nose, AzulWorks is one of the companies tied up in the Nuru saga: Its founder, Balmore Hernandez, allegedly conspired with Nuru on a scheme tracing to 2013 to rig the bidding for an asphalt plant, put a quarter of a million dollars worth of free or discounted work into Nuru’s ranch in exchange for city contracts he wasn’t qualified for — and was one of the three contractors who purportedly presented Nuru with that tractor.
But wait — there’s more: In addition to getting that payday from the PUC, AzulWorks’ Recreation and Parks Department contract to build the lavish new tennis courts in Golden Gate Park was actually increased by $400,000 in November.
Very interesting. And these remain rather interesting times.
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