Attorneys Appealing SF Corruption Case Argue Grand Jury Excluded Black Citizens

A central figure in the corruption scandal that rippled through San Francisco City Hall in 2020 is seeking to overturn his guilty verdict based on allegations that the federal grand jury that indicted him systematically underrepresented Black citizens.

Attorneys for former San Francisco Public Utilities Commission general manager Harlan Kelly returned to the argument that Kelly’s team first raised in an appeal he lodged when he was indicted. In the case submitted to a panel of the 9th Circuit Court of Appeals on Monday, his attorneys wrote that the court’s denial of his motion to throw out the indictment charging him with fraud “undermine[s] every aspect of the district court’s grand jury decision.”

“In 2021, Kelly — a Black man — was indicted by a federal grand jury,” his attorney, Steven Kalar, wrote in a brief to the court. “Not a single Black person sat on this grand jury. This fact is not surprising, because the venire [or jury pool] from which that grand jury was constituted suffered from dramatic underrepresentation of Black citizens.”

Kalar also argued that the court allowed the government to introduce “improper” evidence during trial and made mistakes in the jury’s instructions that confused their deliberative process.

In 2020, Kelly was indicted on a bank fraud charge over allegations that he took bribes from permit expediter Walter Wong, who pleaded guilty and later testified against him. He was later accused of additional “honest services” fraud, and in a superseding indictment filed in 2022, he was charged with nine counts related to fraud in connection with the bribery scheme involving Wong and a separate accusation that he defrauded a loan company of more than $1 million.

Kelly is one of more than a dozen city officials and contractors who were embroiled in a wide-ranging corruption probe that became public in 2020 with the indictment of then-Public Works Director Mohammed Nuru.

Nuru and many of those implicated pleaded guilty, but Kelly maintained his innocence through a weekslong trial in 2023 and since his conviction on six of the wire and bank fraud charges in 2024. He is serving a four-year prison term.

This week, his appeal, which was first filed just days after his conviction last year, was submitted to the 9th Circuit, which said it would decide whether to overturn his conviction based on written briefs and the case’s existing record.

Here’s what those briefs argue.

In an opening brief filed in December, Kalar — who was appointed as Kelly’s attorney six months earlier when Kelly could no longer afford representation — wrote that the court first erred when it dismissed Kelly’s appeal of his 2022 indictment.

Kalar said that, through an independent statistician, Kelly provided evidence that the federal grand jury that indicted him was selected from a pool of citizens that systematically underrepresented Black people, violating the Sixth Amendment, Jury Selection and Service Act, and the 5th Amendment’s Equal Protection Clause.

“Black citizens were underrepresented in this grand jury venire by a shocking 49% — three standard deviations away from the expected composition,” the brief said.

Federal prosecutors disagreed, arguing that the court summoned 2,000 eligible grand jurors and followed its randomized protocols for selecting the panel that heard the government’s case. They said the court’s analysis found no legally significant underrepresentation of Black jury members.

While a comparative disparity test showed that there was some statistically significant underrepresentation of Black people in the grand jury pool, the prosecutors said it didn’t rise to the legal bar needed to qualify in court.

Kalar called the cases the government relied on to draw that legal line “inapposite or unpersuasive.”

In addition to his objection to the verdict as a whole, Kalar also made a more pointed argument for appealing Kelly’s convictions on two counts related to “honest services” fraud.

Kalar argued that during trial, the court allowed the government to introduce improper evidence related to those charges, which were based on allegations that Kelly accepted bribes, including a lavish meal and a five-star hotel stay from Wong in exchange for helping his companies get a leg up on city contract proposals.

Despite objections from Kelly’s attorneys ahead of trial, the court allowed prosecutors to show evidence of San Francisco’s ethics rules and regulations in court. Kalar wrote that this should not have been permitted, since honest services fraud “cannot be based on the violation of a city or state regulation.

“This error was compounded by instructional error,” he continued in the original appeal brief. “The court misadvised the jury on the permissible use of ‘ethics’ evidence, permitting the jury to improperly use that evidence to convict Kelly.”

The government’s lawyers responded that no actual evidence of the ethics laws — like Statements of Economic Interest and San Francisco Sunshine Ordinance Declarations that Kelly submitted — were ever actually presented in court. Some former Public Utilities Commission workers who testified did speak to the Sunshine Ordinance and other ethics laws, but the government wrote that Kelly doesn’t seem to be objecting to anything said in testimony.

They also said that, according to the rules given to the jury in his original trial, they were only allowed to “use evidence of the defendant’s knowledge of, and compliance with city ethics rules in deciding whether the defendant knowingly violated his fiduciary duty as a public official,” not whether he committed honest services fraud more broadly.

It’s unclear when the three-judge panel reviewing Kelly’s case will decide whether to overturn all or part of his conviction. If the judges uphold his conviction, Kelly is expected to get out of prison in October 2027.

He is currently serving his term at the Federal Prison Camp in Duluth, Minnesota.