Law enforcement officials at the federal and local level are showing a strong interest in whether former mayor Willie Brown was at the center of an effort to rig a Housing Authority contract, CitiReport has learned.
City Attorney Louise Renne now also is undertaking an investigation into “procurement manipulation” following a new request from the San Francisco Housing Authority. Six weeks ago Renne produced a report on allegations of misconduct by then-Executive Director Henry Alvarez also requested by the Housing Authority. That report surfaced allegations of contracts directed to benefit specific individuals. Renne wrote then that those questions should be the focus of a second report that she terms “Phase Two.”
“During the course of the investigation,” writes Renne in her report, “other allegations surfaced concerning potential improprieties outside the scope of the investigation.”
“Examples include claims that Alvarez allegedly manipulated the Housing Authority’s competitive process to steer contracts to specific favored individuals, and that he allegedly engaged in various inappropriate hiring practices,” continues Renne in her footnote.
“In this report, the Investigators have focused on their original charge, which was to examine the core allegations of discrimination, harassment and retaliation by Larsen. The Housing Authority has asked the firm to conduct a separate inquiry into allegations of manipulation of the procurement process and those will be covered in Phase 2 of the investigation,” writes Renne.
Several contracts are involved, including a security contract reportedly prompted by Alvarez after a lunch with former mayor Willie Brown and the security company owner, a contract for Treasure Island Development Authority chair Linda Richardson, a contract for former Housing Authority Commissioner Dwayne Jones, and a consulting agreement for an unnamed sitting Housing Authority commissioner.
Brown is most closely linked in the Chronicle’s reporting of Renne’s first report with the contract for a security company.
At issue was the security contract for the Housing Authority and the unsuccessful bid by Personal Protective Services (PPS) that had faced investigations by the U.S. Justice Department for violating tenants civil rights and a formal complaint by the San Francisco Police Department ten years earlier during Mayor Brown’s term in office.
“In another instance, Larsen said Alvarez had him resolicit bids three times for a contract to provide security at public housing projects,” reported the May 9 Chronicle article by John Cote. “Alvarez later called Larsen into his office and said he had just returned from lunch with Chronicle columnist and former Mayor Willie Brown where he met Stan Teets, who runs the private security firm Personal Protective Services, which was not poised to win the contract, the Chronicle said.
“Larsen said that Alvarez told him, ‘You need to figure this out; you need to figure out a way to get PPS the work,’ ” according to the report. “Larsen said that his belief is that Alvarez saw Brown as an influential person, and that he (Alvarez) therefore needed to get Teets a contract or risk losing his job.”
“After PPS failed to win the contract, Larsen said Alvarez told him to start the process over a fourth time, the report said.”
Brown’s relationship with Teets and PPS’ contract with the Housing Authority dates back to the time when he served as mayor. It was subject to multiple federal investigations and complaints from the San Francisco Police Department during that period. The contract ended shortly before Brown left office.
The contract began in 1997 for $120,000 signed by Ronnie Davis, then the Housing Authority’s executive director brought in at Brown’s recommendation. By 2002, and with three mayoral proclamations recognizing PPS’s work as outstanding, the contract had zoomed to more than $2 million and exceeded the amount the Housing Authority paid to the San Francisco Police Department for additional police services.
At the same time, PPS was the object of federal, state and local investigations and complaints that tied them to criminal activity, including civil rights violations of the tenants.
PPS’ hiring of convicted criminals and allowing them guns drew strong objections from the San Francisco Police Department that filed formal complaints with the state in an effort to have PPS business license revoked.
In one newspaper account, after San Francisco police sought to take guns away from three PPS guards, owner Stan Teets reportedly complained to a San Francisco police officer about the Deputy Chief, saying, “If it’s a war he wants, then it’s a war he’s going to get.”
Police officials told the state agency that it had concerns that PPS guards were involved in beatings of tenants and that a guard may have been at fault in a shooting. Police officials also told the state agency that PPS had been tied to questionable searches at five developments.
The U.S. Department of Housing and Urban Development also opened an investigation into PPS based on the Housing Authority’s use of federal funds to pay the contract. The U.S. Attorney’s office also was involved in that investigation.
By 1998, the Chronicle told readers there was reason to call for an audit of the security agency in a July 1, 1998 editorial. The paper also said that Willie Brown remained a strong supporter of PPS despite the reports and investigation of wrongdoing.
“San Francisco has an enormous stake in improving public housing,” the paper editorialized, “and the investigations raise policy issues that could be troublesome even if no criminal wrongdoing were found.”
“Brown appears ready to defend one of his most high-profile appointees no matter what,” the paper continued, referring to Ronnie Davis, the Housing Authority’s director who backed PPS.
“The Board of Supervisors should assert its independence from the mayor, and commitment to taxpayers and public housing residents alike, by ordering through and independent audits of both the security and financial operations of the Housing Authority,” stated the editorial.
In 2001, Davis was indicted by a federal grand jury in Cleveland; Brown joined in a fundraiser to meet Davis’ legal bills. In October 2001, Davis entered into a plea bargain that included barring him from serving with the San Francisco Housing Authority.
By 2013, with Brown once again at the center of controversy over a PPS contract but now a Chronicle columnist, the paper made no editorial mention of problems at the agency or the potential bid rigging.
Brown, contacted by the Chronicle reporter for comment, was quoted saying “I can’t talk to you. I’m at a luncheon.”
The Renne report also includes allegations of additional procurement manipulations intended to benefit specific individuals.
Those named in the report include Linda Richardson, chair of the Treasure Island Development Authority, Dwayne Johnson, former Housing Authority commissioner then working with Platinum Advisers, and another unnamed former Housing Authority Commissioner, as well as a commissioner who was to be paid as a consultant for a company about to be awarded a contract.
(To read the report, click here)
In those instances, Larsen stated that Alvarez indicated that he had been contacted and urged to award those individuals contracts if he wanted his contract renewed beyond the June 2013 expiration. The name of the person Larsen says Alvarez named has been redacted from the report.
Richardson, whose political career began under the auspices of then-mayor Willie Brown, submitted a contract that initially was the high bid and Larsen stated that Alvarez directed him to rewrite the specifications in order to qualify her. In the second round, Richardson’s cost dropped from $185 an hour to $80 an hour and she hovered at the edge of the low bid.
Larsen stated that Alvarez claimed he had been told that he had to get Richardson a contract or that his job would be jeopardized. The name of the person reported by Larsen has been redacted from the report.
Larsen said that the contract could be awarded directly by Alvarez and his staff without extensive bidding so long as it was for under $100,000. One consideration, although not mentioned in the report, is that Richardson as Chair of the Treasure Island Development Authority was the direct supervisor for Mirian Saez, the TIDA executive director and a San Francisco Housing Authority Commissioner who would decide on Alvarez’s contract and any extensions.
Initially the contract was to be for $49,000 and for a 48-month period, Larsen stated, but when it was signed the terms were changed to be $99,000 for 12 months work.
Richardson, in her annual Form 700 filing of Statements of Economic Interest for that year, claimed that she had no reportable interests and no contracts. A complaint has now been filed with the state Fair Political Practices Commission alleging that this was a false filing. Richardson’s 2013 filing does disclose the contract.
Since the contract could be handled at the staff level, there is no record of a vote by the Commission, including a vote by Saez.
Former Housing Authority commissioner Dwayne Jones is linked to a contract award to work with Sunnydale residents to develop a model for redevelopment. Earlier Jones had been the point person in the mayor’s office for a similar program.
Jones and his partner, Eric McDonnell, were not the low bidders for this contract. Larsen states that Alvarez again directed him to rewrite the contract but that ultimately Larsen did not do that. Instead Larsen says that Alvarez rewrote the contract, that Jones and McDonnell dropped their bid to nearly half of its earlier bid, and were awarded the contract.
In her footnote, Renne states that these issues are also under investigation by the U.S. Department of Housing and Urban Development.