Report: More ethics violations in S.F.
The San Francisco Controller’s Office said Friday employees with the San Francisco Department of the Environment — including its director — repeatedly violated ethics rules in its latest report on its investigation into the City Hall corruption scandal.
The controller’s office found that SF Environment employees violated “ethics rules designed to eliminate real and perceived risks of pay-to-play relationships,” by soliciting and accepting donations from Recology before signing contracts with the waste management company.
The department also failed to disclose donations in cooperation with the city’s investigation, according to the Controller’s report.
SF Environment director Debbie Raphael resigned the day before the report came out.
While not all of the transactions were necessarily illegal, the Controller’s Office said, they undermined public trust by making it appear as though city officials can be bribed for favorable treatment.
“Regardless of whether these acts ultimately influenced contract award decisions, they undermine public trust in the department’s decisions, create the appearance of a company making gifts to favorably influence department decisions that would directly benefit them, increase fraud risk, and reflect poor management decision-making,” the report said.
Raphael solicited donations from Recology in 2015 and 2019, around the time of contract finalization and negotiations with the company, the report said.
The report also notes that Raphael regularly completed ethics training during this time and should have sought advice from the City Attorney’s Office before accepting donations.
SF Environment also failed to disclose a $25,000 donation from Recology in 2015 for its Earth Day event through Friends of SF Environment,
which raises money for the city department but does not have the same disclosure rules and is not a part of the city government. Because of this, it is unclear whether the department was required to disclose the donation.
Most donations for the Earth Day event were managed through a city gift fund and disclosed on the department’s website. Any donation over $10,000 needed approval from the Board of Supervisors. But SF Environment did not disclose or obtain approval for the $25,000 donation, and not all of that money has been spent to date, the report said.
The department then withheld information about this donation for a year and a half during the city’s investigation into public corruption following the arrest of former director of Public Works Mohammed Nuru in 2020. The department “narrowly construed the document requests based on what they said was a literal interpretation,” according to the report, and provided information about the donations through Friends of SF Environment only when directly asked.
Department officials also did not disclose to investigators the receipt and return of a check for $6,400 from Recology in mid-2020 after Nuru’s arrest.
A past City Controller report has expressed concerns about “friends of” organizations, saying they lack transparency and raise the risk of fraud. A new city law took effect this year that prohibits department heads from soliciting “behested payments” from any person who is an interested party, such as someone with a contract before the city.
SF Environment employees also regularly accepted gifts and meals from Recology, the report said, even when the department was involved in setting the refuse collection and disposal rates, in violation of city law. Though not all employees at the time received ethics training, the report says that this does not absolve them of responsibility for violations.
“Taken together, we find that (the issues) reflect a long-standing poor ethical climate, deficient management decision-making, and a weak ‘tone from the top’ regarding the importance of city ethics rules,” the report said.
The report is just one look into an extensive corruption scandal involving the city’s relationship with Recology.
In July, Recology executive Paul Giusti pleaded guilty to a federal fraud charge after being accused of funneling $1 million in bribes to Nuru, who played a key role in the rate-setting process for waste collection. Federal prosecutors said that during the years-long bribery scheme between the two, Giusti offered Nuru services, financial contributions, gifts and even a paid internship for Nuru’s son at the company — all intended to curry favor with the city official.
Last April, former Recology Vice President John Francis Porter was also charged with money laundering and bribery. Federal prosecutors have accused Porter of bribing Nuru with $20,000 in an effort to get Nuru’s sign-off on hiking Recology’s “tipping fees”— funds that cover the city’s use of the company’s crushing facility.
Nuru pleaded guilty to a federal fraud charge in January and is expected to be sentenced in May.
San Francisco residents will receive nearly $100 million in overpaid trash-collection fees as a result of an investigation by the City Attorney’s Office.