City Controller’s Secrecy Shields Corruption
San Francisco’s Sunshine Ordinance, mandated by the voters, declares;
“The right of the people to know what their government and those acting on behalf of their government are doing is fundamental to democracy, and with very few exceptions, that right supersedes any other policy interest government officials may use to prevent public access to information. Only in rare and unusual circumstances does the public benefit from allowing the business of government to be conducted in secret, and those circumstances should be carefully and narrowly defined to prevent public officials from abusing their authority.” (Sec. 67 of the Administrative Code)
Openness applies not just to what government is doing, but to wrongdoing as well. When taxes pay for investigations into waste fraud and abuse of City resources, taxpayers deserve to know which City agencies break rules or flub their duties. A welcome example of investigative transparency is the series of “Public Integrity Reports” recently issued by the Controller’s Office. There, embarrassing facts are laid out, with names named.
... the outcomes of investigations are veiled in secrecy. Identifying Departments where misconduct occurs – or is unsubstantiated - would show that the Whistleblower Program is independent - and serious about cracking down on waste, fraud and abuse. Withholding the names of City Departments where violations occur conceals mismanagement and corruption while denying information and accountability to taxpayers and tipsters. There is no legal obligation to continue this cozy secrecy.”
In stark contrast are the Controller’s Whistleblower Program Reports. These too are “public integrity reports” but their results are cagily masked, leaving the public in the dark as to which City agencies violated policies, regulations or laws. Even whistleblowers who submit department-specific tips cannot discern if their complaints were resolved by reading these texts.
For example, the most recent Whistleblower Program Report provides 2 typically opaque investigation summaries on pages 18-19;
Case #1: Allegation: A department head organized a series of employee appreciation events that cost the department thousands of dollars and a significant amount of staff time. Department managers instructed employees to bill their time spent at these events as vacation or other personal time, but did not do so themselves. A vendor used at the events was selected due to personal connections to a departmental leader.
Resolution: The investigation substantiated that these events cost the department tens of thousands of dollars and hundreds of hours of staff time. It also substantiated that department managers recorded their hours to work (non-leave) codes after instructing staff to use personal time for these events. The investigation did not substantiate that the vendor the department used (and paid for goods and/or services provided) at the events was selected due to its relationship with any departmental leader.
Case #2: Allegation: A manager spent more than $900 in city funds to cater breakfast and lunch for seven employees at their home.
Resolution: The investigation found that the manager spent $900 of city funds on seven employees, or approximately $64 per meal. Although limited policy and guidance requires city employees to conduct the City’s business in a fair and cost-efficient manner, the City does not have a policy on allowable costs when providing food and beverages at work-related events. Therefore, the department developed its own policy based on the U.S. General Services Agency’s per diem expense guidelines for federal agencies.
In neither case is the department identified. Why not? Why should the public not know? This level of secrecy exceeds the confidentiality granted to Whistleblower Programs by California Code 53087.6(e)(2). While the identities of individual whistleblowers, witnesses and subjects are protected, State law allows programs “to issue any report of an investigation that has been substantiated, or to release any findings resulting from a completed investigation that are deemed necessary to serve the interests of the public.”
Curiously, the “resolution” in case #1 dodges any restitution or discipline for executives whose picnicking was logged as “work” while staff had to sacrifice vacation time. Hidden is how many “tens of thousands of dollars” were spent. In case #2, no comparison is drawn between the plentiful $128/employee spent for breakfast plus lunch versus what federal guidelines recommend. In fact, the federal 2019 meal allowances for San Francisco were $18 for breakfast and $19 for lunch - just $37/employee. That’s $259 for 7 people – not $900. Small potatoes, but as a cultural plague infecting many City departments over many years, it turns into big money, wasted.
An easy assumption is that these 2 cases refer to former DPW boss, Mohammed Nuru, who staged lavish employee appreciation events and hired cronies for catering services. Indeed, the cases are strikingly similar to the DPW shin-digs documented on pages 39-40 in the 2nd Controller's "Public Integrity Report.” However, a knowledgeable insider (not identified to prevent retaliation) explained that these cases pertain to the Public Utilities Commission (PUC), its former General Manager Harlan Kelly, and his then-deputy, Juliet Ellis.
A Whistleblower Provides Clarity
Our reliable source tells us; “there was an uproar when Harlan and his Executive Team told us to use vacation time to attend the picnics” in his July 2019 emails to all staff. There were 4 staff picnics, starting at Crocker Amazon Park on 8/16/19. Others occurred in Millbrae and Hetch Hetchy. The PUC hired “Spice It Up, LLC” to cater the Crocker Amazon and Millbrae events. The picnics also featured hat and T-shirt giveaways, entertainment, and rented games for kids, likely provided by other vendors. Records show that the PUC paid $64,576 to Spice It Up in FY 2019-20, compared to $14,441 the year before.
As for the $900 feast for 7 employees; our source asserts it was another PUC extravaganza that stirred an “uproar.” Reportedly, in October 2019, Juliet Ellis invited 6 subordinates to her home for breakfast and lunch. The double-buffet was likely provided by “BiRite Catering, LLC.” Observers were outraged that platters advertised as serving 15 people were ordered for 7. Further, this lavish expenditure was approved by PUC’s Financial Officers, thereby calling into question the agency’s financial ethics. Records show that the PUC paid BiRite Catering $26,321 in FY 2019-20, surpassing the $17,767 paid out the previous year. The Westside Observer requested copies of the luncheon invoices from the PUC, and awaits a response.
Barriers to Transparency
Getting the Controller’s Office to fairly examine PUC’s expenditures could be hampered by “City Family” dynamics and conflicts of interest. It’s tough — and perilous — to investigate powerful friends and colleagues. Controller Ben Rosenfield is a multi-generational ”City Family” stalwart. And, from 2008 through 2014, Deputy Controller Todd Rydstrom served as PUC’s Assistant General Manager and Chief Financial Officer — alongside, then under Harlan Kelly. Will Rydstrom recuse himself from overseeing PUC-related audits, performance reports and whistleblower complaint investigations?
Weirdly, neighborhood newspapers deliver truer accounts of whistleblower tips than those transmitted by the Controller’s intentionally-obscured Whistleblower Program Reports. Nobody can tell what agency was involved, so everyone speculates about possible offenders. Miscreant City agencies are thus shielded from public awareness – and inquiries. It’s laughable that this secrecy is justified as a way to protect whistleblowers. Why must we read US Attorney Press Releases and local newspapers for critical information derived from whistleblowers, when we already pay for a program that supposedly resolves whistleblower complaints? City employees who want action on their corruption complaints now contact the FBI or the media, while the Whistleblower Program mainly shuffles nickel-and-dime grievances.
Obfuscation Breeds Mistrust
One reason that whistleblowers do not trust the Whistleblower Program is that the outcomes of investigations are veiled in secrecy. Identifying Departments where misconduct occurs – or is unsubstantiated - would show that the Whistleblower Program is independent - and serious about cracking down on waste, fraud and abuse. Withholding the names of City Departments where violations occur conceals mismanagement and corruption while denying information and accountability to taxpayers and tipsters. There is no legal obligation to continue this cozy secrecy. In fact, the Whistleblower Program had previously identified investigated Departments, and other county Whistleblower Programs do so, as the Westside Observer reported in 2012.
Given the widespread exposure of corrupt practices in publicly identified City Departments, the suffocating secrecy imposed by the Controller’s Whistleblower Program undermines trust in its investigations and conveys complicity with wrongdoing.
Dr. Derek Kerr is a San Francisco investigative reporter for the Westside Observer Contact: email@example.com
December 29, 2020