SF Supervisor Seeks to Restore Oversight of Homeless Shelter Contracts Amid Corruption Scandal

San Francisco City Hall (Travis Wise/Flickr)

In the name of expediting construction of homeless shelters, San Francisco Mayor London Breed in March 2019 asked the Board of Supervisors to relinquish its oversight of the contract process.

The argument was, if Public Works could simply award shelter construction contracts faster, people living in dire circumstances would be moved off the streets months earlier — saving crucial time.

But it didn’t quite work out that way.

The lack of oversight allegedly allowed former Public Works Director Mohammed Nuru to grant more than $1 million in homeless shelter construction contracts to Walter Wong, a permit expediter who was arrested by the FBI last month and charged with conspiracy to commit fraud and conspiracy to engage in money laundering, according to the U.S. Attorney's Office.

Nuru was also arrested by the FBI in January on public fraud charges.

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Now, Supervisor Aaron Peskin said he will introduce legislation Tuesday allowing the Board of Supervisors to regain oversight and ultimate approval over homeless shelter construction in the city.

“In the name of streamlining and expediting services to the city’s unhoused, the Board of Supervisors ceded our authority and checks and balances,” Peskin said last Thursday. “Mr. Nuru drove a truck through it.”

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The findings come from the City Controller’s Office, which issued a report early last week detailing rules that it urged city leaders to tighten in order to better prevent government corruption, including the one pushed by Breed to streamline homeless service construction.

Under that ordinance, Public Works no longer had to set up a normal bidding process for contracts for the construction of homeless shelters, nor did they need ultimate authorization from the Board of Supervisors to award those contracts.

The move had broad support, even from pro-business organizations and homeless nonprofits that often stand opposed. A broad range of groups, including the San Francisco Chamber of Commerce, Larkin Street Youth Services and the Mission Housing Development Corporation, all spoke publicly in support of the measure.

“I think the proof is really in the pudding. You have service provider after service provider” who supports the measure, Sam Moss, executive director of Mission Housing Development Corporation, said to the Board of Supervisors last year, before the legislation's continuation from a board committee to the full board.

In March, the Board of Supervisors approved the measure within 20 seconds after it was introduced, granting the Public Works director — at the time, Nuru — the broad authority to just say “yes” to contractors.

In its report, the controller’s office revealed Nuru said “yes” to roughly $24.6 million in homeless shelter contracts, about $10.5 million of which were “directly awarded” with no solicitation of any kind. Some $3.5 million in contracts were also awarded through “unclear” methods because “no outreach or solicitation documentation exists,” the report found.

Nuru also awarded three contracts — including the construction of a Bayview navigation center — totaling more than $2.5 million to Charles Pankow Builders, according to the City Controller’s Office, which released more detailed data in the wake of the report. The firm was subpoenaed by the City Attorney’s Office in February in connection to the corruption scandal.

Meanwhile, Wong, the permit expediter arrested by the FBI, was awarded a $907,000 contract to renovate Jelani House, a substance abuse rehab center, and a $110,595 contract to construct a building attached to a navigation center on Fifth and Bryant streets, according to the controller's office findings. Nuru also awarded a $171,000 portable toilet contract to restaurateur Nick Bovis, who was also arrested by the FBI in connection with the corruption schemes.

Ron Alameida, a Public Works deputy director, was among officials who publicly supported the fast-tracking measure last year.

"I'll vouch my support for the ordinance," he told supervisors.

But emails of his that have since been made public, show that he solicited a donation from a city contractor Public Works oversaw to a charity run by Nick Bovis, one that allegedly used such contributions to throw lavish parties for city officials, in violation of ethics laws.

The contractor, Webcor Builders, was later subpoenaed in the City Attorney’s Office corruption investigation.