S.F. corruption probe widening, subpoenas show
The ongoing federal investigation into corruption at San Francisco City Hall has reached into the City Administrator’s Office, the Planning Department and the Department of Public Health, three newly released subpoenas reveal.
Through the subpoenas, the FBI appears to be interested in learning whether city contractors passed money to nonprofits, possibly at the behest of highranking city employees, to pay for events like department holiday parties and picnics. The Chronicle obtained the subpoenas, which were filed in May, through a public records request.
The arrest of former Public Works Director Mohammed Nuru earlier this year has pitched the city into a widening scandal that is playing out in part through investigations under way by the FBI and the City Attorney’s Office.
The federal subpoenas request numerous records and documents from a number of city departments, including Public Works.
One subpoena, sent to the city’s custodian of records on May 5, seeks “all invitations, posters, fliers, announcements and programs” related to any “holiday party, picnic, breakfast award or recognition ceremony” for the City Administrator’s Office or Public Works over the last 10 years. It also demands any photos and videos from those events, as well as documentation spelling out which elected officials and department heads attended them.
The May 5 subpoena also demands all meeting minutes, notes or other communications that mention or relate to executives at Recology, the San Francisco Parks Alliance and Lefty O’Doul’s Foundation for Kids — a charity founded and operated by restaurateur Nick Bovis. Bovis was arrested along with Nuru this year. The two were charged with fraud in connection with a failed scheme to bribe an airport commissioner. Bovis has since agreed to cooperate with investigators
The subpoena also provides an illuminating example of what federal investigators are looking for in attempting to trace how money might have flowed from contractors to nonprofits to city departments.
In a 2015 letter to Recology Vice President Mark Arsenault, Public Works Deputy Director for Operations Larry Stringer invites Recology employees to the agency’s annual open house and employee appreciation picnic “in sunny McLaren Park.”
But along with the invitation for Recology workers to join in the merrymaking, Stringer said the department also hoped “we can count on your support” to make the event “a success.” Stringer is unambiguous that the department sought a financial contribution, inviting the trashhauling and recycling company to make a donation to Public Works’ “fiscal sponsor” — the Parks Alliance.
The subpoena also seeks a decade’s worth of documentation of Public Works’ contracts with major firms, including Clark Construction, Pankow construction, Pacific Gas and Electric Co., Recology, Webcor Builders and two businesses run by contractor Florence Kong, Kwan Wo Ironworks and SFR Recovery, a constructiondebris recycling firm.
Naomi Kelly, Nuru’s former supervisor, is the city administrator. She helped precipitate Nuru’s arrest after she told the FBI he had contacted her and informed her about the federal corruption investigation. She is not personally listed in any of the May subpoenas.
Her husband, Harlan Kelly, the general manager of the San Francisco Public Utilities Commission, was named in a subpoena federal officials handed down last month. That subpoena suggested federal investigators are interested in examining contracts the commission awarded to several companies, some of which have previously been linked to alleged schemes traced back to Nuru in investigations by the FBI and the City Attorney’s Office.
The other two subpoenas, issued on May 19 and 26, respectively, were sent to the Planning Department and the Health Department demanding documents and records related to a construction and demolitionwaste facility at 2401 Ingalls St. that is managed by companies tied to Kong.
Among other documents, planning officials were ordered to produce any communications, permits and other documents related to the facility, as well as any communications between planning officials and Nuru that relate to permits submitted by SFR Recovery, Kong’s construction-waste firm.
Similarly, the Health Department, which is tasked with inspecting and certifying the safety of the facility, was ordered to turn over any communication and other documentation related to permits or licenses issued to SFR Recovery along with Kong and other company employees.
Federal investigators also sought “all communications between anyone at DPH and Mohammed Nuru” related to permits or licenses SFR Recovery obtained from the Health Department.
In addition to Nuru, two department heads — Sandra Zuniga, a romantic partner of Nuru who managed the city’s FixIt Teams, and Tom Hui of the Department of Building Inspection — have already been toppled as a result of the investigations, and leaders at several construction firms, including Kong, are facing criminal charges for allegedly bribing Nuru in exchange for inside information and favoritism on city contracts.
A spokesman for the U.S. Justice Department declined to comment on the subpoenas.