Farrell’s ‘benefits’ for firm as mayor

Letter from employer cites intangibles of time in office

Representatives of Mayor Mark Farrell’s venture capital firm expect to reap “long-term benefits” from his term as mayor, according to a letter sent to the company’s partners the morning after he was sworn in.

“If you have not already seen the news, our partner Mark Farrell was elected last night by his colleagues to serve as the mayor of San Francisco,” said the “confidential announcement” from Thayer Ventures Managing Director Christopher Hemmeter, which went on to cite the “intangible benefits” of having Farrell in city government.

Reaction in City Hall was swift, and several of Farrell’s colleagues were stunned when the letter surfaced Tuesday.

The letter was sent to several of the firm’s partners at 9:15 a.m. the day after six supervisors voted to have Farrell fill former Mayor Ed Lee’s seat until the June 5 election. Lee died of a heart attack on Dec. 12, leading board President Lon-

don Breed to assume the office of mayor and precipitating a power struggle in City Hall.

The Chronicle obtained a copy of the letter on Monday.

“Since co-founding Thayer Ventures, Mark has served as an elected member of the San Francisco Board of Supervisors, which has been a personal passion for Mark and has also created many intangible benefits for our work at Thayer Ventures,” the letter states.

It continues: “Mark’s term as mayor of San Francisco will end in June of 2018, at which time Mark will return full-time to Thayer Ventures, most notably a full six months ahead of schedule. We are incredibly excited about this development, both because we believe Mark’s role as mayor of San Francisco (as short as his term will be) will inure to the long-term benefit of Thayer Ventures, and as important Mark will be 100 percent dedicated to Thayer Ventures significantly ahead of schedule.”

The letter does not specify what those intangible or longterm benefits would be. If he hadn’t been elected mayor, Farrell would have served as District Two supervisor until January.

The letter goes on to say that Thayer had prepared for Farrell’s sabbatical to serve as mayor “both internally and with our portfolio companies,” suggesting that the company may have known ahead of time that Farrell could gain the office.

Supervisors Hillary Ronen and Ahsha Safai expressed shock, but declined to comment after they were shown a copy of the letter.

But Supervisor Malia Cohen blasted Farrell and his “coconspirators” — the five supervisors in the board’s progressive bloc and moderate Supervisor Jeff Sheehy — who spent weeks crafting a deal to install Farrell and unseat Breed.

“His co-conspirators are just as guilty,” said Cohen, one of Breed’s closest allies on the board.

“I eagerly wait to hear back from Mark Farrell and his spin doctors on how this wasn’t a backroom deal,” Cohen added.

Speaking to The Chronicle’s editorial board last month, Farrell said he had no “clarity” he would become mayor until the votes were cast. He said he had agreed to consider it.

“From the moment I was sworn in as mayor, I took an unpaid leave of absence from Thayer,” Farrell said in a statement to The Chronicle on Tuesday. “I am completely walled off from the company until my term is over,” he said.

In reference to the “intangible benefits” he brought to Thayer, Farrell added: “When I was first elected to the board, I brought my private sector experience to City Hall. Being in public life for the last eight years has helped me gain a unique perspective, which has made me a better businessman.” Thayer Ventures invests in “travel technology” companies.

Hemmeter downplayed his statements Tuesday, saying he’d wanted “to reassure investors that our company would continue to thrive despite Mark’s six-month absence.”

“In my haste, I made a poor choice of words that I regret,” he said.

Farrell took an unpaid leave of absence from Thayer Ventures on Jan. 23, the night he was sworn in as mayor.

An agreement filed with the city attorney’s office on Feb. 2 and signed by Hemmeter, Farrell and another managing director, Jeffery Jackson, lays out the terms of Farrell’s absence.

It bars Farrell from performing any job duties or functions, spending any time on business, making any decisions for the firm or providing any services on its behalf. It explicitly forbids Farrell from participating in investment decisions.

An ethicist called the letter’s language “distasteful” and “absolutely inappropriate,” but not illegal.

“Everybody’s going to be scrutinizing every action Farrell takes to make sure nothing goes to the firm,” said Bob Stern, who was president of the Center for Governmental Studies in Los Angeles.

Supervisor Aaron Peskin, who led the negotiations that ended in Farrell’s appointment as mayor, didn’t address the content of the Thayer memo but viewed its public surfacing as political payback from tech investor and campaign donor Ron Conway, a supporter of Breed.

The progressive supervisors who voted for Farrell described their act as an indictment of Conway, who has contributed and raised hundreds of thousands of dollars for campaigns that favor moderate, tech-friendly candidates over more progressive opponents.

“This is proof that Ron Conway and his associates are throwing their weight around,” Peskin said of the letter. There is no indication that Conway was behind the release of the letter.