SF Corruption Saga Continues: Permit Expediter Walter Wong to Repay $1.7 Million

San Francisco is making one man tied to an ongoing corruption scandal pay back every penny he bilked.

Walter Wong, the admittedly crooked permit expediter and contractor who helped facilitate alleged bribes for former Public Works Director Mohammed Nuru and other city officials, will pay San Francisco $1.45 million in ill-gotten gains he was improperly awarded for city contracts.

Wong's restitution to the city, part of a settlement with San Francisco announced by City Attorney Dennis Herrera on Thursday, will also see Wong pay $317,650 in penalties and late fees for ethics violations, mostly for unlawful meals Wong provided to city department heads.

"San Francisco will not tolerate bribery and insider dealing," Herrera said in a statement. "This settlement ensures that taxpayers are made whole."

Wong and his numerous companies, including W. Wong Construction Co., had 10 non-competitive procurements with the city — including contracts and purchase orders — where he was set to provide services to help homeless people, provide holiday lights and a pilot program to convert city streetlamps to LED lighting technology, among others.

Under the settlement, Wong will repay the city for those non-competitive procurements, which were granted by Nuru and former San Francisco Public Utilities Commission General Manager Harlan Kelly, two men facing corruption charges from the U.S. attorney's office who lie at the center of an unfolding scandal that has seen five department heads either drummed out of city government or resigning on their own. Kelly has denied wrongdoing.

So why does Wong owe the city? He didn't win these contracts by being the best bidder, the city argues – instead, they were given to him while he was bribing city officials. No one else had a chance to get these contracts. Wong did have some other contracts with the city which were awarded in a competitive process that were deemed lawful.

While the federal government continues its criminal investigation, Herrera's office continued its civil investigation, issuing more than two dozen subpoenas. That investigation found Wong hadn't just netted illicit contracts from Kelly and Nuru, but set up a dinner between a billionaire housing developer and the former Department of Building Inspection Director Tom Hui, an ethics violation. Hui stepped down after Mayor London Breed urged that he be removed when the investigation was made public.

Herrera's announcement of Wong's settlement lays bare the threads between all of the men in the scandal so far.

"Documents made public in the investigations of Nuru, Hui and Kelly revealed that Wong's connection to all three related back to his close relationship with former Mayor Ed Lee," the announcement reads.

Indeed, in one of the federal charging documents, Wong and Kelly discuss one of Wong's permits and mention a meeting with "35," a reference to Ed Lee's initials on a phone keypad.

Since his indictment in June 2020, Wong has pleaded guilty for his crimes. He agreed to cooperate with the federal government's investigation.

The settlement agreement needs a vote of approval by the San Francisco Board of Supervisors to be finalized. Funds will be disbursed to the city from $1 million already seized by the federal government from Wong when a conviction is reached, according to the settlement agreement.

Wong will be barred from doing business with San Francisco for five years under legislation passed just last year by the Board of Supervisors and proposed by Herrera in August.

Under that law, Herrera has barred other contractors who were also embroiled in the corruption scandal, mostly for alleged bribery: Nick Bovis (the owner of Lefty O'Doul's restaurant), Alan Varela and William Gilmartin of ProVen Management, and Florence Kong, as well as her companies SFR Recovery Inc. and Kwan Wo Ironworks Inc.

Since the corruption scandal emerged, the city attorney's office and the city controller have conducted a public integrity investigation to identify the systems and practices that allowed corruption to flourish in several San Francisco government departments.

A report they released in June last year revealed Nuru was given unprecedented independence in awarding contracts without oversight by the mayor's office.

Mayor Breed immediately instituted new practices recommended by that report to institute tighter contracting oversight.