Harlan Kelly in front of a yellow background.
Former PUC general manager Harlan Kelly, who is now facing federal felony charges

Lawyers for the former Public Utilities Commission General Manager Harlan Kelly, who has been accused in federal court of bank fraud, filed a motion on Monday to nix evidence claiming Kelly consorted with prostitutes on a municipal trip to China. 

Kelly’s attorneys also sought to exclude evidence regarding municipal China trips because they would “necessitate a distracting mini-trial related to Ed Lee.”

Including this evidence, Kelly’s lawyers argued, would induce a diversion into the alleged activities of the deceased former mayor and other city officials who were among “nearly a dozen people” to travel alongside Kelly to China in 2004. Kelly also traveled to China in 2013. 

The Department of Justice, in 2020, accused Kelly of accepting lavish gifts of goods and travel from Walter Wong, a contractor and permit expediter, in exchange for favors with regard to bidding on city contracts. 

Monday’s legal filing, however, stems from a separate federal case filed in 2021, in which Kelly is accused of bank fraud in a purported $1.3 million scheme commencing in 2015 to defraud Quicken Loans. Realtor and politico Victor Makras was convicted last year of bank fraud for his part in the enterprise, and received a punishment that did not mandate any incarceration.

Kelly’s lawyers, making the case for the scattershot and confusing nature of including evidence regarding the 2004 and 2013 China trips, note that Supervisor Aaron Peskin and his wife traveled on the 2013 trip. But Peskin was not in office in 2013, and he says this is inaccurate. 

The Board President said it was “absurd” for him to be dragged into this matter, and said he traveled to China not in 2013, but in 2007: “I went after the scheduled head of our delegation, our then-Mayor Gavin Newsom, backed out and I was asked to take his place as head of delegation. I paid for the entire thing out of my own pocket, as was disclosed at the time.” 

“It’s unfortunate that Harlan would not only use my name, but use it incorrectly. I guess desperate people do desperate things.”

Kelly was arrested in November, 2020, and charged with taking bribes and kickbacks from Wong between 2014 and 2019 and giving him preferential treatment in a bid for city lighting (a bid Wong eventually did not win). 

That 2020 federal filing included this passage:

Wong said that they decided to withdraw from the process after the city made multiple changes to the contract requirements. According to Wong, after expressing frustration to [then-Public Works boss Mohammed] Nuru about the changes, Nuru told him to forget about the project because someone else had bribed Kelly with a much larger sum and Wong was not going to win…

The episodes Kelly’s lawyers are hoping to exclude from his scheduled June 26 bank fraud trial took place in 2004 and 2013 in trips to China, during which Kelly met Wong and allegedly received lavish accommodations and services. 

Kelly’s attorneys argued that, while the feds could argue that Wong had expectations that his generosity to Kelly would be reciprocated, they could not prove that Kelly viewed the transactions similarly. 

“While the Government’s evidence regarding the 2004 and 2013 China trips may be evidence of Wong’s intent to influence Kelly,” they wrote, “it says nothing about Kelly’s intent (or lack thereof) to exchange something of value in return for an official act, and should therefore be excluded.” 

Federal allegations on events far removed from Kelly’s purported bank fraud  — and which allegedly occurred far earlier — are meant to show “Kelly’s intent in deceiving Quicken Loans” and that he was  “willing to lie and deceive.”

In the 2004 trip, Kelly allegedly “consorted with prostitutes.” His lawyers argued that the prostitution allegations were immaterial to the fraud case and would create “unfair prejudice” against him.

“The law is clear that evidence of sex-related activity that does not relate directly to the charged offense should be excluded,” they wrote.

Kelly’s attorneys also attempted to exclude other federal evidence constituting a rather kitchen-sink approach to a bank fraud case. This evidence related to lies Kelly allegedly told to the Department of Building Inspection in 2011 in which he listed his home as a duplex instead of a single-family home; ethics forms in which he did not list a zero-interest loan as a “gift;” and evidence that Wong performed construction work on Kelly’s home in 2018 and 2019, as that alleged work occurred after the federal probe’s focus through September, 2017.

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Managing Editor/Columnist. 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 editor at San Francisco Magazine from 2015 to 2017. You may also have read his work in the Guardian (U.S. and U.K.); San Francisco Public Press; San Francisco Chronicle; San Francisco Examiner; Dallas Morning News; and elsewhere.

He resides in the Excelsior with his wife and three (!) kids, 4.3 miles from his birthplace and 5,474 from hers.

The Northern California branch of the Society of Professional Journalists named Eskenazi the 2019 Journalist of the Year.

Joe was born in Sweden, where the Chilean half of his family received asylum after fleeing Pinochet, and spent his early childhood in Chile; he moved to Oakland when he was eight. He attended Stanford University for political science and worked at Mission Local as a reporter after graduating. He then spent time in advocacy as a partner for the strategic communications firm The Worker Agency. He rejoined Mission Local as an editor in 2023.

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  1. I’ve been getting SFPUC permits for 20+ years. It is so corrupt. Have lost all faith in our local government. It’s worse than the mafia.

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  2. I find it reprehensible that the city continues to pay Kelly a lavish pension, allegedly $22,000 a month, but is cutting its funding for the Food Bank.

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  3. This is the entitled public parasite who had his city issued SUV, painted a color more appealing to him, for many thousands of city tax dollars. That he was not canned then, shows the depth of corruption in this twisted city of delusional fools.

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  4. I’m fine with dragging Ed Lee through the mud. Remember the fake bomb scare when the police had to remove him (and only him) from City Hall during his testimony about something? The guy was a dirty as they come.

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  5. The corruption runs much deeper and farther than we will ever know. Or want to know. It spans decades and reaches into every department of this city.
    But no one wants to blow the whistle because they are all making so much money. With egregiously high paying jobs and guaranteed pay increases year after year, SF is buying employee silence. It is so fucked up. It is mind blowing!

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