Controller says Nuru solicited donations

Disgraced former Public Works Director Mohammed Nuru allegedly solicited donations from private sources and directed them toward a nonprofit that financially supported his department, according to a new report by the city controller. The concern is that the arrangement allowed Nuru to quietly work behind the scenes to benefit his department.

At issue is a system in San Francisco that allows nonprofits to raise money to support a city department’s interests — like staff training, luncheons or community events. Since these arrangements have little public oversight, Controller Ben Rosenfield said, it creates an opportunity for “unethical steering of purchases to occur.”

Such is the latest revelation in a sweeping corruption investigation led by the city attorney, which is largely focused on San Francisco City Hall. The investigation first came to light in January, when Nuru was charged over an alleged

scheme to bribe an airport commissioner in exchange for approving a lease at San Francisco International Airport. Since the initial charge against Nuru, the investigation has expanded to include others in City Hall and the private sector.

The sweeping investigation has put a spotlight on a “paytoplay” culture in San Francisco City Hall, where critics say personal relationships and loyalties are rewarded and help cover up political corruption. Critics of the longstanding culture of the socalled “city family” say the scandal puts a massive stain on City Hall, and undermines the public’s confidence in their elected officials.

On Thursday, Rosenfield detailed how certain philanthropic organizations — called “friendsof ” organizations — have long supported city departments. Thirtythree of 56 city departments report having such a relationship, with agencies like libraries and San Francisco General Hospital. Many have transparency about their funding.

But the report focused on how Nuru allegedly used one such nonprofit, the San Francisco Parks Alliance, to circumvent the city’s purchasing controls and then direct funding to vendors of his choice. Their relationship with the Department of Public Works was unique in that there is no public oversight on the account.

The vendors who benefited from the donations, according to the report, include restaurateur Nick Bovis and permit consultant Walter Wong, both of whom have also been charged by the FBI for corruption and have pleaded guilty to conspiracy and fraud.

This is an issue, the report says, because donations that would end up benefiting the Department of Public Works were never publicly disclosed. That created “a perceived ‘paytoplay’ relationship” between Nuru and those who donated, the report said.

“While philanthropic organizations provide tangible benefits to all of our residents, abuses in these relationships undermine the important role they play,” Rosenfield said. “When gifts are solicited from those that do business with the City, it creates a risk to fair and transparent public processes.”

According to the report, City Administrator Naomi Kelly allegedly knew about at least one instance when Nuru solicited funds from companies with business or regulatory decisions before the Department of Public Works. Those funds were donated to the Parks Alliance and then used to host a 2019 holiday party “and other employee appreciation events that benefited those in the department.”

Bill Barnes, a spokesman for the city administrator, said Kelly was “not aware” of the individual organizations that were being solicited by Nuru. But she was aware “that the event was paid for by private funds.”

According to the report, the Parks Alliance says it didn’t know it was being used “unscrupulously” by city officials.

“Like everyone, we were outraged to learn of the public corruption in our local government,” Drew Becher, CEO of the San Francisco Parks Alliance, said in a statement. “We’re a trusted partner to many community groups and city departments and welcome any and all actions that bring more transparency and oversight to ensure the public’s trust.”

The Parks Alliance also said in the report that it did not profit from the relationship with Public Works.

According to the report, the Parks Alliance made 960 payments totaling nearly $1 million to support Public Works activities between July 1, 2015 through Jan. 17, 2020. Those funds were largely spent at the direction of Nuru on events for his staff, merchandise and volunteer programs, according to the report.

The excessive use of the reimbursements causes the “city to lose financial control over these transactions,” the report said.

Ismail Ramsey, a lawyer for Nuru, could not be reached for comment.

While the city attorney’s office is leading the investigation, the controller’s office plans to release a series of reports that look into the policies and practices that have allowed corruption to exist. Thursday’s release was the second report.

The Parks Alliance works with or provides money to 200 groups and city agencies to support “citywide open space and park infrastructure.”

The Parks Alliance said it reached out to Nuru in 2019 to formalize its relationship through a memorandum of understanding, “though this effort was ignored,” according to the report.

Immediately after the report was released, Mayor London Breed issued an executive order to “strengthen transparency and accountability” between departments and such nonprofits.

Among other new rules, Breed’s order requires all department heads follow rules around payments made for legislative, governmental or charitable purpose, at the request of the public officials. Such rules do not currently apply to department heads.

“These ‘friends of ’ organizations provide important philanthropic support for our parks, our libraries, and other important civic services, but we need to ensure that this support is not tainted with any perception or risk of ‘pay to play’ politics,” Breed said in a statement.

Supervisor Matt Haney, who has long sparred with the Department of Public Works over the city’s filthy streets, said he will introduce legislation next week that would go even further than Breed’s order and prohibit department heads and some employees from soliciting donations for such organizations.

The report also comes as voters are set to vote on Proposition B, a ballot measure written by Haney, which would split the Department of Public Works into two departments. It would separate the Public Works’ street cleaning, sidewalk maintenance and sanitation duties into a new agency, leaving the remaining department to handle engineering, design, project management and other work tied to public infrastructure.

“This report detailing flagrantly inappropriate behavior by the Department of Public Works also underscores the need to pass Prop. B in November, and implement effective oversight at a Department that is clearly out of control,” he said.