City implements changes to stave off future Public Works contract corruption

The San Francisco Controller’s Office Monday released a number of sweeping recommendations to improve contracting procedures at the Department of Public Works as both city and federal prosecutors continue to investigate alleged corruption charges against former DPW Director Mohammed Nuru.

Both the City Attorney’s and Controller’s offices have worked together for months to root out wrongdoing by city employees related to contracts. They are also reviewing compromised contracts, purchase orders and payments.

The Controller’s Office made eight recommendations to close gaps in city laws aimed at preventing fraud and waste.

Part of the report’s summary said:

“Public Works awarded 366 contracts worth $1.4 billion during July 2017 through March 2020. Contracts with a value of $1.1 billion were awarded through construction contracting procedures. Although low-bid and other competitive requirements provide protections, some procedures and policies could be strengthened to provide additional safeguards to reduce the risks of fraud and abuse.”

One of the first recommendations is for the mayor to assign a city official who will approve final DPW contracts, taking that authority from the director.

Nuru had power to approve city contracts in excess of the threshold amount of $706,000, but the Controller’s Office points out that other city departments either have boards or commissions that review and approve contracts.

The report recommended the Ethics Commission examine and close loopholes to ensure that city law does not create avenues for misconduct in the acceptance of gifts by city employees and officials, especially from persons and companies with pending contracts.

Nuru has been accused of accepting gifts from city contractors and developers, and attempting to bribe a former airport commissioner in an alleged scheme to sway a contract towards restaurateur Nick Bovis. Bovis, owner of Lefty O’Doul’s, was attempting to open a chicken restaurant at the airport.

Additionally, the Ethics Commission would require all Statements of Economic Interest, known as Form 700, to be filed electronically and be reviewed annually.

Controller Ben Rosenfield said in a statement:

“Our job is to ensure the transparency, accountability, and ethical behavior that San Franciscans are owed when it comes to the delivery of city services and the use of their tax dollars. In simple terms, the Controller’s Office is seeking to rectify bad policies and practices that undermine those goals.”

The office plans to release additional reports in the future.

Mayor London Breed The City will begin immediately implementing the reforms recommended by the City Attorney and Controller’s offices.

In a statement, Breed said:

“If we can take Executive action, we will do so immediately. If we need to pass laws, we will work with the Board of Supervisors to do so.”

As recommended by the Controller’s Office report, the mayor added that she has already revoked authority granted in 2011 to the DPW director related to contract approvals.

Supervisor Matt Haney plans to introduce an anti-corruption legislative package based on the report’s recommendations.

Haney said:

“The Controller’s analysis makes it clear that we need sweeping structural reform in City Hall. We’ve let years of corruption waste taxpayer dollars.” 

Haney added:

“City bureaucrats have awarded millions of dollars in contracts to their friends with no oversight.”

The FBI investigation into Nuru has led to charges against a number of people, including Bovis, well-known permit expeditor Walter Wong and Sandra Zuniga. Zuniga, who served as the former director of the mayor’s Fix-It Team, was also identified as Nuru’s long-time girlfriend.

A hearing is set for Thursday at the Board of Supervisors’ Government and Audit Committee. The City Attorney and Controller’s offices will update the board on its investigation at that time.