Walter Wong, the man at the center of San Francisco’s Venn diagram of corruption, has reached a $1.7 million settlement with the city.
Under terms announced today by the City Attorney’s office and Ethics Commission, Wong and four of his companies will pay $1.45 million for problematic contracts he received from the city, as well as an additional $318,000 in ethics fines and fees.
Wong has been a ubiquitous and controversial city figure for decades: a background power player, with political ties that bridged ideological divides. He and his family ran a plethora of businesses, and he worked as a contractor, but he was best known as a “permit expediter,” pushing clients’ projects through San Francisco’s sclerotic and arcane permitting system.
In June 2020, Wong pleaded guilty to federal charges that he had undertaken conspiracies to commit fraud and money-laundering, and pledged to assist the feds in their ongoing San Francisco corruption probe. He was apparently good to his word: Wong’s extensive participation was evident in the charging documents against erstwhile PUC boss Harlan Kelly released in November 2020, in which Kelly was accused of attempting to rig a streetlight bid for Wong in exchange for bribes — a bid Wong ultimately lost out on.
Wong’s punishment for those federal crimes has not yet been determined. He and his companies were also the recipient of a fusillade of city attorney subpoenas in 2020.
Today’s settlement requires Wong and his companies to repay money the city attorney alleges were obtained through “non-competitive contracts, purchase orders, and/or grants that were improperly approved by City officials.” Ten PUC contracts are at issue, as well as a $100,000 challenge grant from the Office of the City Administrator.
Those account for some $1.3 million. Wong and his companies will additionally agree to not collect compensation for some $164,000 in work rendered but not yet paid for an emergency Public Works contract. He additionally admits to a dozen violations of the Campaign and Governmental Conduct Code, and will shell out nearly $318,000 in “penalties and late fees.”
Wong and his companies acknowledge that “they are irresponsible bidders and that they engaged in willful misconduct,” and agree to forego any attempt to land city contracts for five years. Wong et al. further agree that “they will not apply for any permit or license from the City on behalf of any client or customer for a period of five years”; this section of the settlement was bluntly titled “No permit expediting.”
Finally, Wong agrees to continue cooperating with city corruption investigations.
While $1.7 million is not ostensibly a tremendous amount of money, today’s settlement only touches on the contracts the city attorney’s office felt it could prove were tainted.
Forcing Wong out of the permit expediting business, in fact, could be a far more consequential result.
Wing Lok “Walter” Wong was born in Hong Kong in 1948 and emigrated to San Francisco 23 years later. He was a steadfast ally of former Chinatown powerhouse Rose Pak, and a reliable fundraiser, bundler, and behind-the-scenes player. He was an ally of Mayor Willie Brown, and a major Ed Lee backer who helped finance the cynical, farcical “Run, Ed, Run” campaign. But he also backed Matt Gonzalez in 2003, providing the underdog mayoral candidate with his office headquarters in Wong’s hulking CitiCenter building at Mission and 13th streets.
Wong’s standing in this city grew precarious in January, 2020, when Public Works boss Mohammed Nuru was arrested by FBI agents and charged in a bribery scheme.
Reading through the 75-page federal complaint, it was clear that “CONTRACTOR 2” — a man who accompanied Nuru to China to be feted with costly booze and “some stone” from a Chinese billionaire developer with designs on San Francisco — was Walter Wong.
Clearly, the city development at issue here was 555 Fulton; Wong handled the permitting (naturally). Nuru was accused of using his influence to push this project through in exchange for the royal treatment he received overseas.
And a barrage of city attorney subpoenas of most all parties ensued.
Wong, it turned out, was the thread connecting three since-ousted San Francisco department heads: Nuru, Kelly, and ex-Department of Building Inspection boss Tom Hui.
Interestingly, when Hui needed help landing his son and son’s girlfriend city jobs, he wrote to Wong — who looped in, you guessed it: Nuru.
Hui resigned in March 2020 after the city attorney’s probe turned up evidence proving what so many already knew: He had outsourced much of the functioning of this department to Wong.
Longtime Department of Building Inspection sources told me that, yes, Wong used to have his own keys to the building. Yes, he used to walk behind the counter and stamp his own papers. Yes, workers there called the entryway to this area the “Wong Doors” — a nod to how often he (improperly) walked through them, but also a clever architectural pun (“Won Doors” are a fire-protection device).
Sources within the Department of Building Inspection also told Mission Local that Hui “literally stood over people’s shoulders” to force out the controversial 555 Fulton project “sooner than it should’ve been done.”
That, again, is the project Wong was attached to, and whose owner gave Wong and Nuru the royal treatment. And the one that, mysteriously, had documents vanish off the DBI computer system, then reappear — prompting a February 2020 visit from the FBI.
Hui downplayed his connections to Wong to the city attorney investigators, but DBI officials described them as “joined at the hip.”
While “permit expediter” is an anodyne term implying some manner of expertise, it often is much darker than that. At its best, it involves connected players leaning on officials they know in order to receive faster service than regular people.
At its worst, however, it involves an entirely corrupted system: Hui, in fact, was just one of many Wong allies seeded throughout the plan-check side of the Department of Building Inspection. They were put there to do what Wong needed of them. DBI sources say Wong went so far as to put telltale colored tape on his clients’ folders, indicating to his people within the department which folders they needed to get to.
Wong, arguably, ran a department within a department. He did not drop by Building Inspection HQ anymore to drop off papers or press the flesh; his employees did this in a process that had long since become entrenched.
As such, getting him out of the permit expediting business may be the most meaningful development coming out of today’s settlement — and something that would not have been easily doable via conventional legal means.
“This settlement ensures that taxpayers are made whole, maximum penalties are levied, and Mr. Wong loses the privilege of doing business with the City or acting as a permit expeditor,” said City Attorney Dennis Herrera via statement.
“San Francisco will not tolerate bribery and insider dealing.”