The leaders of scores of youth organizations that provide Summer Together programming for tens of thousands of San Francisco children were jolted on Friday by a city memorandum abruptly stating that $25 million in planned funding would be unavailable. That sum represents nearly 40 percent of a $64.1 million budget.
“I was trying not to panic,” said a senior nonprofit leader who received the Friday memo from Maria Su, executive director of the Department of Children, Youth and Their Families (DCYF). “We hire staff ahead of receiving city payments. We hire staff and admit students accordingly. We’re supposed to open our doors next month.”
Su’s memo stated that, due to a Mohammed Nuru-inspired January ordinance limiting the ability of department heads and elected officials to solicit donations from current or potential contractors, that dozens of millions of philanthropic dollars would be curtailed. This would include $14 million slated for 10,000 slots for Summer Together, $7 million toward providing literacy and math support for 2,245 kids, and $1 million to provide 1,000 children with $1,000 stipends.
Her letter came on the heels of a May 16 order from Mayor London Breed to department heads, instructing them to “pause any solicitations or requests for philanthropic funding of any department programs or projects” until such requests have been vetted by the City Attorney.
“Over the past two years, I secured over $40M in philanthropic support from individuals, foundations, and corporations,” wrote Su in her Friday memo. “Unfortunately, under this new City Ordinance, funding for our Summer Together Initiative is severely impacted. Sadly, I must inform you that we will not be able to continue soliciting philanthropic funds to leverage DCYF’s investment for Summer Together … I realize this news is very disappointing, frustrating, and perhaps confusing.”
But the confusion did not end with Su’s Friday letter. It turns out that, prior to releasing the Friday memo that put scores of nonprofits serving thousands of children on pins and needles, that Su did not have her department’s actions vetted by the proper person in the City Attorney’s office.
The City Attorney’s office on Tuesday declined to directly disclose the advice it gave to its client, the DCYF. But, this morning, members of the Board of Supervisors announced that the office told them it did not believe that these proposed grants to the city were affected by this “new City Ordinance,” and that a written memo is forthcoming.
“The City Attorney was never consulted,” said Supervisor Aaron Peskin, “And, when consulted, they said it did not run afoul of the law the Board of Supervisors unanimously passed to stem the tide of quid-pro-quo corruption that has been the shame of San Francisco of late.”
Even prior to the City Attorney’s Tuesday analysis, members of the Board pushed back at Su, whom they accused of needlessly terrifying nonprofit workers and parents — and misconstruing an ordinance that the board passed by an 11-0 vote.
The law, which has been on the books for some five months now, restricts elected officials and department heads from soliciting “behested payments” — donations requested by a public official — from “interested parties;” essentially, a person or organization doing business or seeking to do business with the city.
This ordinance came in the wake of ousted Public Works boss Mohammed Nuru extracting donations from Recology, whose pay rate Nuru had an outsize role in setting. These donations were made to the Parks Alliance, where they were used by Nuru as a slush fund to throw lavish parties.
“I really don’t understand why that memo was sent out before they had clear legal advice,” said Supervisor Ahsha Safaí. “I came to find out they hadn’t consulted with the top City Attorney who is dealing with ethics reform in the city, Andrew Shen.”
Added Peskin, “If [Su] honestly believed this, she should’ve checked before she sent out this letter that scared the bejeesus out of hundreds of organizations and thousands of children. It’s clear at this point the right people in the City Attorney’s office including the City Attorney himself had no idea she was going to write this provocative letter.”
Su told Mission Local that she was advised by Hank Heckel, the mayor’s compliance officer, to consult with the Deputy City Attorney tasked to DCYF. Heckel is an attorney, but does not work in the City Attorney’s office. And, while Su says she did consult with Deputy City Attorney David Ries prior to issuing her memo, Mission Local is told that only Shen is entitled to offer legal advice on this subject.
At issue here are proposed grants of $18 million for summer activities from Crankstart, an outfit founded by billionaire Michael Moritz, and $7 million from two other donors that are, at this time, not named.
Su’s letter further mystified members of the Board of Supervisors, because the ordinance in question states that “any person providing a grant to the City or City department” does not come under its purview, and this $25 million is, explicitly, grant money. Grants, unlike Nuru’s shenanigans, are highly monitored and accepted and spent via a formal procedure, and do not carry an explicit quid-pro-quo benefit for the donor.
Su countered that another provision of the law states that a department head is not permitted to hit up “any person who attempted to influence the employee or officer…” for a donation, and she worried that the donors’ expressed hopes for more literacy and mental health programming constituted an “attempt to influence.”
But this line of thinking also struck Board members as bizarre. “We get accept-and-expend grant requests all the time,” said Safaí. “The idea that someone wouldn’t have any conversations with the department about how the money would be spent is absurd.” The ordinance in question, he continued, was not crafted “to go after grant-makers for giving grants to the city.”
Designating a discussion about what a grant would pay for as an “attempt to influence” a city official “seems like a crazy excuse,” says Peskin. “Because grants are provided for a specific purpose.”
If this interpretation is valid, “then all the grants we’ve accepted in the last five months and the dozen or so grants on the Board of Supervisors calendar on Tuesday are all illegal. We have, like, $50 million in grants on Tuesday’s calendar. Ha, ha: I don’t think so,” Peskin said.
Su told Mission Local that she felt the need to write that memo to nonprofit partners to reassure them that, at least, the $39.1 million in city money was coming through, and inform them of “what was going on.” Recipients of that memo, however, said they did not appreciate being put into a state of existential panic by a note that came late, on the cusp of summer, but also hadn’t been cleared by the proper legal authority.
Legal questions regarding the grants are now in the hands of the Ethics Commission. Its spokesman, Michael Canning, said he cannot comment on the commission’s interpretation until it is finalized.
If the commission sees things differently than the City Attorney, it would set up a puzzling situation. The Ethics Commission is the jurisdictional body here, but it is advised by the City Attorney’s office, which has already made its views on this matter known.
The ordinance in question was unanimously supported by all 11 supervisors, but passed into law without Breed’s signature. Without naming names, members of the Board of Supervisors subtly accused her of attempting to sully the law she declined to sign.
“I would just say some people like to put politics before the concerns of families and organizations that provide a safety net,” said Board President Shamman Walton, without elaborating further.
“Some people seem to think this legislation is complicated. It’s really not. It’s straightforward about what you can and cannot do.”
Update: The City Attorney on Tuesday afternoon put its analysis in writing. Unless the Ethics Commission unexpectedly disagrees with the operative section of the memo from Deputy City Attorney Ann Pearson pasted below, the grants will be coming and the children will be served:
Based on the facts as we know them from discussions with the department, our office recently concluded that the Crankstart grant does not qualify as a behested payment under the ordinance because Crankstart does not qualify as an “interested party.” The behested payment ordinance has an exception for contractors, if they are a grantor providing funds to the City, such as Crankstart’s prospective grant to DCYF. Further, Crankstart has not “attempted to influence” any DCYF officials for the purposes of the ordinance, since its communications with DCYF have focused entirely on the existing Summer Together program that it wishes to fund.