Post image for Inside the Willie L. Brown Money Machine

Inside the Willie L. Brown Money Machine

by Larry Bush on 04/03/2012

in Paper Trails

For several generations of San Franciscans, the mention of a political machine meant one thing: the Burton Machine. Under the auspices of Phil Burton, a loose coalition of liberals united on issues as diverse as opposition to the Viet Nam war and urban poverty, along with environmentalists and disenfranchised minorities, began to cooperate on an agenda to wrest power away from San Francisco’s traditional Republican establishment.

It gained control of the city’s Democratic County Central Committee, helped launch careers for George Moscone, Willie Brown, Art Agnos and sent Phil’s brother John first to the state legislature and then to congress to serve alongside Phil.

Phil Burton’s signature statement is inscribed on his statue, where a paper peeks out of his pocket with the scrawl, “Terrorize the Bastards.” They were fearless in taking on powerful interests (in Congress Phil Burton’s Democratic Study Group used the same tactics to move the House against a Democratic President over the Vietnam War).

But what made the Burton machine recognizable to all was its issue-driven agenda: human rights, health care, the environment, unions with job protection and decent working conditions, and an urban renaissance in the face of a decline affecting many cities.

There was one other recognizable feature of the Burton Machine: it was about empowering people who had little or no say in the decisions that affected them.

And it certainly wasn’t about helping the rich get richer.

While elder John Burton continues the tradition, Willie Brown left the machine and started a new one…the Willie Brown Money Machine.

Helping the rich get richer, primarily in order to make oneself richer, is exactly what the Willie Brown Money Machine is all about. In the classic words of Walt Kelly’s Pogo, “We have met the enemy and it is us.”

Brown’s money machine, like his mayoralty and his career in public or private life, relies on personal relationships and owed loyalty. Mayors at their best have an array of skills that make them effective. They combine an ability to see an opportunity with a vision that sets the pace and direction for change. They know what will be required and they learn to see in people things even their own mother never saw and how to use that. Sometimes they know the rules and where the advantages can be gained through them.

Above all, the asset that makes those elements come together is a relationship built on a singular loyalty to the person at the top of the machine. More than a title or an office, that is the power that can keep a machine producing results in or out of office.

The network of former Brown aides and campaign workers now populate top positions in city agencies or have moved on to posts with major city contractors or as lobbyists.

They include Tiffany Bohee, new head of the “Redevelopment Successor Agency,” Linda Richardson, new President of the Treasure Island Development Authority, Naomi Kelly, newly named Chief Administrative officer overseeing all city contracts, Kelly’s husband Harlan Kelly in charge of the multi-billion dollars PUC infrastructure program, the reappointments of Eleanor Johns, Brown’s former chief aide and current Executive Director of the Willie L. Brown Institute, to the Airport Commission, her husband Richard Johns to the Historic Preservation Commission with the power to open doors to tax benefits, as well as others at the Public Utilities Commission, Recreation and Park Commission, and down the list.

Mohammed Nuru is only the latest in a list that also includes Supervisor Malia Cohen, Ron Vinson, a senior official with the Department of Technology, Bevan Dufty, Lee’s new homeless coordinator and seeking to be elected chair of the San Francisco Democratic Party, among many others.

Add to the list of former staffers and their partners those who have signed on either directly or through proxies like Rose Pak, and up comes Doreen Ho, newly elected President of the Port Commission with a hands-on role for the America’s Cup.

The most important, of course, is Ed Lee, the mayor Brown shoehorned into office and who has done favors for Brown by retaining or naming Brown allies to key posts where they can continue to do favors for Brown clients and allies.

Brown made sure that he had a virtual army of loyalists when he increased the number of mayoral “special assistants” – hired and fired at will outside civil service – from the 119 he inherited to 521 with a request in the 2000 budget for an additional 100 special assistants.

The Corporate Boardroom Meeting

It’s a room where none of us are invited.

But on May 4, 2004, a dozen corporate leaders gathered around a conference table on the 25th floor of a downtown San Francisco office building.

They had been invited by Willie L. Brown, Jr. to hear his proposal for using his decades of government contacts to do them favors that would net multimillion dollar contracts and put a half million dollars in his own pocket to start.

Just four months earlier Brown had left the San Francisco mayor’s office, ousted by term limits.

Brown told the corporate leaders – each had a potential financial interest in a proposed California high-speed rail effort – that he had the contacts to get the Legislature to start the approvals.

Among those gathered were the Parsons Brinkerhoff’s CEO and three top officials of the California High Speed Rail Authority.

Brown, according to the Oakland Tribune’s account at the time, took his seat at the head of the table to propose that he, and his former colleagues former Los Angeles Assemblymember and Transportation Chair Richard Katz and former Assembly member – attorney Terence Goggin, a fixture in Brown’s money machine, be paid $1 million. Each of the dozen firms would provide $100,000 to start.

“In return, they would steer a favorable budget into law by lobbying all the key state politicians. Then they’d launch a campaign to convince California voters to pass a $10 billion rail bond,” the paper reported.

Brown, Katz and Goggin followed three days later with a memo repeating the proposal.

“The memo, obtained by ANG Newspapers, confirms a picture that emerges from interviews with more than half of the participants and dozens of transportation sources familiar with high-speed rail,” the paper told its readers.

“Over the next 60 days we propose to concentrate our considerable political resources and campaign experience,” the memo states. “This will require a substantial initial consultant retainer for our fees and expenses of $400,000.”

“Another $600,000 was needed to start the bond campaign, the memo said. Overall, Brown would get half of the $1 million, while Katz and Goggin would split the rest.”

According to the article, at least some of the industry representatives viewed the proposal as a “classic shakedown” although trolling for money from potential beneficiaries of government spending is not illegal.

Brown called the group “Friends of California High Speed Rail,” and the meeting and memo appear to be its only event. The organization never registered nor did Brown, Katz or Goggin register as lobbyists. At that time, Brown’s proposal appeared to be shelved.

In May 2010, a photograph of the groundbreaking for the first Bullet Train terminal showed that one of those wielding a shovel was Willie L. Brown, Jr. By then the Parsons Brinckerhoff government relations director was Stuart Sunshine, formerly Willie Brown’s Director of Parking and Traffic.

One indication that this took place almost a decade ago comes from the report that Brown’s cut was to be $500,000. According to sources approached by Brown recently, his asking price is now double to $1 million.

Brown’s effort to make a handsome living from the contacts he developed as an elected official is nothing new in the world of post-politics.

Nor is it unusual for companies that might gain from public works projects to bankroll measures to first earmark public funds for those projects.

Funding a campaign to convince voters to put money into a project that in turn holds the promise of contracts is very much the way business is done. It was true of the November bond measure for street repair, where just over $150,000 in campaign contributions set the stage for more than $250 million in spending. It was true for the BART extensions to the airport, and for the city of San Francisco’s other bond measures. Unions whose members are most likely to get work also are among the campaign contributors. No law restricts donors to ballot measures, only to candidates for office.

Still, it surprised some to find that Brown was using his considerable network of contacts in the state legislature where he served for 16 years as Speaker of the Assembly and  self proclaimed “ Ayatolla” against the interests of San Francisco, the city he once led.

In 2009, Brown reportedly turned to the state legislature to overturn a San Francisco law that prevented Parsons from bidding on a city contract with terms it wrote. Parsons then sought to share in the $26 million Public Utilities Commission contract.

Brown went behind the city’s legislators to have the measure introduced by another members of the Assembly. Not satisfied with proposing that the San Francisco law be overturned, Brown had the measure written to take effect retroactively to allow Parsons to bid.

San Francisco’s City Attorney already had deemed Parson’s attempt to bid on the project to be a violation of state law.

Brown’s end-run came as a surprise to the Board of Supervisors, where Brown’s actions were viewed as an “attempt to strong-arm the city on behalf of a global conglomerate,” according to a San Francisco Weekly article that first broke the news. A resolution opposing Brown’s play quickly was introduced.

The Chronicle took a swing at the measure in an editorial.

“There is something inherently unfair about going back to rewrite a law after a possible infraction.

“AB746 is more than a technical clarification to the law. It’s the type of special-interest lawmaking for the well-connected that gives Sacramento a bad name,” opined the Chronicle.

The Chronicle noted that the “well-connected” in this case was their own columnist, but also admitted that the paper was unable to get its columnist to return calls.

“Brown, who writes a weekly column in The Chronicle, did not reply to messages seeking comment,” stated the June 30, 2009 editorial.

The next day, the state senate pulled the bill for the year.

Today, the way into the office of the mayor handpicked by Brown to warm the seat until a new mayor could be elected, and then for a full four-year term, is out the elevator and through the atrium that now holds a bust of Willie Brown. It was moved up outside the mayor’s door from its previous place in the basement.

City officials claim the move was necessitated by nothing more that a repair needed at the former location.

Brown does not register as a lobbyist or disclose his consulting contracts, hiding behind the attorney client loop hole, but in the past two years, he played a role in the sale of the Market Street building that now is Twitter’s new offices, has ties to AECOM, the company involved in the Transbay Terminal, the Central Subway, the new Public Utilities Commission headquarters, with Recology and more.

San Francisco’s lobbyist law, unlike Los Angeles and other jurisdictions, only counts those who directly contact city officials and not those paid to be “big game hunters.” They help bag city contracts and permits by advising whom to contact, what persuasion to offer, how to work around any rules and to loom in the background as available muscle.

(San Francisco also leaves a loophole allowing contributions from those seeking development and other permits, banning only contractors from making contributions).

In fact, Brown maintains a higher profile than Mayor Lee as the go-to guy in San Francisco through his San Francisco Chronicle column of name-dropping and insider gossip featuring himself.

Raffling Hunters Point to Asian Investors

Last fall, as Brown protégé Ed Lee nailed down a four-year term as mayor, Willie Brown was also stepping into a new role.

He became a broker for pay-to-play overseas investors to obtain visas in exchange for funding projects, aimed first at Hunters Point and then at Treasure Island.

Brown became a principal in Golden State Renaissance Ventures that simultaneously launched the San Francisco Bay Area Regional Center approved by Washington to facilitate EB-5 visas for those willing to invest $500,000 in disadvantage communities and $1 million in other locales.

Brown’s venture, headed by his longtime attorney Steven Kay, intends to generate $300 million in its first five years.

“The first fund, which also will be marketed to potential investors in India and Russia, will seek $27 million from 54 investors for the Hunters Point project’s infrastructure,” the San Francisco Business Times reported in its March 16 edition. “The next fund will support the residential phase of the project…[the] center also could get involved with the Treasure Island redevelopment project and a life sciences incubator, but those plans aren’t yet solid,” the Business Times reported.

Participation in the program through a Center like Brown’s carries one huge advantage, in addition to Brown’s contacts. The program requires that the investment create 10 new jobs, but if it is arranged through a Center, the job count can be based on a real estate model rather than an actual job count so that things like taxi business and restaurant increases far from the disadvantaged neighborhood would count.

It’s a loophole that would make Willie Brown proud.

Applicants will pay around $40,000 each to Brown’s Center for their work facilitating the match up on investment opportunities and the government paperwork for the visas. After two years, the investor can apply for a green card for permanent residency for themselves and their families, including children they hope can enter American universities. Best of all, they go to the head of the line while poor and middle class applicants for visas wait.

Brown’s connections to Bohee and Linda Richardson are like money in the bank.


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