Harlan Kelly Heads to Court
Harlan Kelly Heads to Court
How we got here, other officials who might be nervous, and why the new U.S. Attorney could squash the City Family corruption investigation
I think there are probably a lot of folks in San Francisco government who haven’t been sleeping well, even before Anderson’s warning and Wong’s guilty pleas. Two of them might be Nuru’s close friend Harlan Kelly Jr., general manager of the San Francisco Public Utilities Commission (SFPUC), and his chief strategy officer and assistant general manager of external affairs, Juliet Ellis.
— “Reynolds Rap,” The Marina Times, July 26, 2021
There’s a certain irony in the fact Harlan Kelly Jr., former general manager of the San Francisco Public Utilities Commission (SFPUC), heads to court on corruption charges June 26 — exactly three years to the day I wrote an exposé titled “Friends with Community Benefits” for my “Reynolds Rap” column in the Marina Times newspaper. The article delved into the agency’s Community Benefits Program, a shadowy behested payments plan concocted by Kelly and his chief strategy officer and assistant general manager of external affairs, Juliet Ellis.
In March of 2020, I wrote that Ellis was managing more than Kelly’s external affairs — in fact, she was having an affair with her married boss. They weren’t subtle about it, either, taking frequent trips together, including a personal junket to Mexico where they snacked on tequila and Cheetos in their room. Kelly happens to be married to (now former) San Francisco City Administrator Naomi Kelly. The Kellys are Willie Brown protégés, appointed to their current positions by a fellow Willie Brown protégé, the late Mayor Ed Lee. The Kelly-Ellis romance was common knowledge in the incestuous bowels of City Hall, but the affair — and the extent of their corruption — remained clandestine, ignored both by the City’s mainstream media and alternative press.
In July of 2020, three months after my column about their ratepayer-funded liaisons, federal officials obtained personnel files for the couple, along with complete records related to any trips they took, including expense reports and reimbursement records, back to 2005. The U.S. Attorney’s Office, then led by David Anderson, also ordered the agency to produce any commission audits from 2010 to the present related to those trips. In December of 2020, Ellis stepped down from her post.
Surprisingly, Ellis wasn’t named in the criminal complaint, which culminated in an FBI raid on Kelly’s home in Nov. 2020, just before the U.S. Attorney’s office charged him in an alleged long-running bribery scheme. Those charges stemmed from another story I broke in my “Friends with Community Benefits” exposé — an illicit arrangement with contractor and permit expediter Walter Wong. I noted that Kelly should be sweating the guilty pleas of Wong, which included an agreement to cooperate with the FBI. It’s no secret that Wong did favors for a lot of city bigshots, and that included Harlan and Naomi Kelly. Numerous workers inside the SFPUC told me not only did Wong do work for the power couple, but “Harlan bragged about it openly.”
During my eight-month investigation, I discovered the Kellys pulled three permits on their 11th Ave. home in San Francisco between 2011 and 2014. The authorized agents on each of those permits was Best Design Construction. A 2010 court case, W. Wong Construction Co., Inc. v. Watt, mentions that Wong introduced the Watts to “Charles Ng of Best Design.” Wong even used Ng’s plans to apply for a building permit on their behalf.
HILLARY RONEN’S HISTORY LESSON
During the June 15 round of San Francisco’s budget review process, District 9 supervisor Hillary Ronen unleashed her usual histrionics on Mayor London Breed after Ethics Commission Acting Executive Director Gayathri Thaikkendiyil said that cuts to the commission included significant reductions, especially to the ethics training program for city employees and the enforcement division. “How many city employees were indicted in the last five years by the FBI? I think I can name, like, five off the top of my head. And yet despite that, the mayor's gutting the ethics department?” Ronen fumed. Evidently, she isn’t aware of how toothless the Ethics Commission truly is — in fact, they had absolutely nothing to do with the discovery of corruption in the fabled “City Family.” For that, we go back to a story I penned five years ago about the king of the recent San Francisco corruption scandal, former director of the Department of Public Works, Mohammed Nuru.
“Despite ethical missteps, misappropriated taxpayer funds, lawsuits, and incompetence as the leader of street cleaning in one of the world’s filthiest cities, the mayor continues to stand behind Mohammed Nuru,” I said in my April 2019 “Reynolds Rap” titled “It’s time for Mayor Breed to sweep DPW boss to the curb.”
After that issue of the Marina Times hit the streets, I received a lengthy anonymous letter, obviously from inside the agency, mentioning another more personal reason the mayor might not want to fire Nuru — “He dated London Breed” (several other DPW sources said they were aware of the relationship as well). The letter also mentioned other messy Nuru scandals, including “creating the Fix It Department for current girlfriend Sandra Zuniga” after she didn’t get a managerial position within DPW.
My curiosity started while following Nuru’s Twitter feed (under the ironic handle @MrCleanSF), where he was touting the cleanliness of streets in China, Argentina, and Chile during trips taken in October 2018. Nuru snapped photos of himself with landmarks and high-ranking officials.
I emailed Rachel Gordon, DPW spokeswoman (and former San Francisco Chronicle City Hall reporter). “I assume these were work related, so I would like to know the dates of the trips, how much the trips cost, and the reason for each trip,” I wrote. Gordon’s response was swift: “Hi Susan. These were not work-related trips. He was on a personal vacation, no government business nor funding involved.”
So how, I wondered, was the public servant in charge of keeping San Francisco’s infamously feces-and-needle-strewn streets clean, able to embark on a nearly month-long “vacation” to three foreign countries? It turns out, the trips were financed by developers hoping to do business with the city. Nuru took “travel, hotel stays and lavish gifts” (like a $2,070 bottle of wine) and met repeatedly with “a Chinese billionaire seeking to construct a large mixed-use building in San Francisco.”
On the morning of Jan. 29, 2020, at a wickedly early hour for a writer, my iPhone started buzzing with calls, emails, and texts from workers at DPW, City Hall insiders, and loyal readers of my column — Nuru had been arrested by the FBI (in August of 2022, he was sentenced to seven years in prison).
Girlfriend Zuniga agreed to plead guilty to money laundering — according to the complaint, she received cash each month to make the mortgage payments on Nuru's vacation home in Colusa County, and traveled with Nuru on that lavish two-week contractor-subsidized trip to South America in 2018 (the one DPW spokeswoman Gordon told me was “purely personal”).
In my February 2020 column, I wrote for a second time about Breed’s reluctance to let Nuru go, again surmising a romantic relationship might be the reason. Just two weeks later, on Valentine’s Day (you can’t make this stuff up), Breed came clean: she and Nuru had indeed been romantically involved “20 years ago” (though one of my sources, a former garbage collector, claimed he saw Nuru leaving Breed’s house on his early morning route much more recently).
Breed also admitted to taking $5,600 in “gifts” from Nuru to fix an old car. For that, the Ethics Commission fined the mayor $22,792 — surely Ronen’s whining for more funding will make the agency more formidable, but I’m not holding my breath.
SHOULD FRIENDS WITH COMMUNITY BENEFITS BE SCARED?
Despite the downfall of Kelly and Ellis, why does the SFPUC still seem intent on keeping the inner workings of the Community Benefits program to themselves, even under strategically appointed new boss and former city attorney Dennis Herrera? As I wrote in 2021, the answer could be straightforward (they realize requiring contractors doing business with them to “commit direct financial contributions” is pay to play), more complex (offering direct or indirect input as to where the money goes is likely illegal), downright sinister (kickbacks to SFPUC staff and allies), or somewhere in between (they’re spending an exorbitant amount meant for the community on staff and expenditures for their nonprofit partners).
Ellis, in my opinion, shouldn’t be sleeping well. She and Kelly founded and managed the enormous, multimillion-dollar agreements between the SFPUC and Joint Venture Boards, a group of representatives from two different contractors who team up on an SFPUC project. There are numerous Joint Venture Boards with tentacles so far reaching I would have to write a book to fit them all in. For our purposes here, let’s use AECOM-Parsons as an example.
On Nov. 28, 2012, shortly after construction giants AECOM and Parsons created a joint venture that secured a $150 million contract from the SFPUC for management services on the $7 billion Sewer System Improvement Project (SSIP), Ellis sent a Scope of Services memo for “Community Benefits Commitments” to the AECOM-Parsons Joint Venture Board with a minimum total commitment of $1.5 million for the 15‐year agreement, meaning AECOM-Parsons is committed to spending a minimum of $1.5 million in the community.
Isn’t that a good thing, you ask? Indeed, and the SFPUC did some excellent work with the money extracted from their contractors. From 2012 to Jan. 31, 2020, firms provided over $5 million in financial contributions. But the Community Benefits positives are eclipsed by a complete lack of transparency. Millions of dollars go to nonprofits — we don’t know exactly how many millions, because the SFPUC won’t say. Ellis and her team ran a shady show that made it impossible for outsiders to follow the money — and Herrera hasn’t changed that.
TIES THAT BIND: DWAYNE JONES AND SHAMANN WALTON
Jones’s reputation is well known at City Hall. Former San Francisco supervisor Chris Daly once said, “If you are going to have an operation where you’re buying political support in the Southeast part of the town, Dwayne Jones is the guy.”
In 2004, then-mayor Gavin Newsom announced the Communities of Opportunity program, intended to help families living in San Francisco’s public housing projects with after-school tutoring, job placement, health care, addiction treatment, and more. But, according to Board of Supervisors budget analyst Harvey Rose, after two years and nearly $4 million, the eight programs operated by a dozen nonprofits had little to show for it. Instead, the money was spent frivolously: $570,882 for conferences, mostly for hosting a gathering in San Francisco in 2007 for community development professionals; $162,000 for events, including a Comedy Shop performance with six comedians and the hip-hop group Def Jam; $464,823 for consultants, including $300,000 in public relations; $399,000 for a program office and community staff; and $1.6 million for “community-based organizations and other services” — in other words, right back into the pockets of the service providers hired for the job. Newsom also ponied up $370,000 in city funds to cover the cost of providing a top mayoral deputy to oversee the program. His name? Dwayne Jones. Communities of Opportunity shuttered and the families it was supposed to help were shuffled into already existing programs. It was one of Mayor Newsom’s biggest boondoggles thanks to the man he put in charge, Dwayne Jones.
In 2013, an investigation into bid rigging at the San Francisco Housing Authority involving former Executive Director Henry Alvarez focused on possible co-conspirators (including former mayor Willie Brown). According to a report by then-city attorney Louise Renne, Alvarez manipulated the competitive process to steer contracts to specific favored individuals. Dwayne Jones — who served as a Housing Authority commissioner under Alvarez — was one of them, lowering his original bid to get the job.
Despite his questionable ethics in handling nonprofit money and contracts, Ellis — a longtime friend who called Jones “her boy” in a 2015 Facebook post — and her boss/boyfriend Kelly made him a “fiscal agent” through the Consortium, a somewhat fuzzy nonprofit with an office located at 1485 Bayshore Boulevard along with three other companies run by Jones: Urban Equity Group, Urban Ed Academy, and his main firm, RDJ Enterprises — which, in a blatant conflict of interest, subcontracts with the SFPUC and AECOM. Urban Ed Academy receives Community Benefits, and SFPUC contractors wrote checks totaling more than $600,000 to the Consortium, where the Board of Directors consisted of Jones’s wife and his business partners. At one time Jones even had an office at SFPUC headquarters (something Harlan Kelly denied until I produced the office chart).
In 2020, when I asked SFPUC Communications Director of External Affairs Tyler Gamble (who left shortly after the shakeup) how the Joint Venture Boards decide which nonprofits get Community Benefits money, he said they did their own research: “Contractors gather information from a variety of sources including internet searches and SFPUC publications such as the Bayview Environmental Justice Analysis to understand what communities need and the most impactful, meaningful strategies to address the need. The more they do that, the easier it becomes.” I countered that if SFPUC points contractors to their own publications, that’s influence. For example, one of the nonprofits touted in the Bayview Environmental Justice Analysis is Willie L. Brown Middle School (yes, named after that Willie Brown). In a series of canceled checks I obtained, AECOM-Parsons paid $30,000 to the San Francisco Unified School District, which Gamble confirmed went to the Willie L. Brown Middle School.
If Joint Venture Boards were really choosing their own nonprofits by doing random Internet searches, allies of Kelly and Ellis should have played the lottery because they had some amazing luck. For example, in canceled checks from AECOM-Parsons (totaling $655,000, a drop in the bucket compared to the millions running through the various Joint Venture Boards), the most prolific beneficiary was Young Community Developers. Not only was Jones the executive director from 1998 to 2003, Shamann Walton held the six-figure position from 2010 until he joined the Board of Supervisors in January 2019. During Walton’s tenure, AECOM-Parsons wrote $169,500 worth of checks to Young Community Developers. Of course, Walton was endorsed by Harlan Kelly (surely it can’t hurt to have a close friend in the District 10 supervisor’s seat where most of those Community Benefit dollars are doled out).
COMMUNITY BENEFITS AUDIT GOES NOWHERE
At a Jan. 20, 2022, hearing on the long-awaited SFPUC audit, supervisors questioned why corruption within the Community Benefits Program was allowed for so long, and even proposed dismantling it altogether. Audits and Oversight Committee Chair Supervisor Dean Preston suggested that the SFPUC should account for every penny of CBP and Social Impact expenditures to date, as well as the roles of SFPUC staff (the audit has since gone nowhere). The committee did a decent job asking tough questions, but there was one name that never came up: Dwayne Jones.
Inside sources say Ron Flynn, chief of staff to the SFPUC’s new general manager, Dennis Herrera (and who also served as lead attorney on government contracting under Herrera in the city attorney’s office), was under “specific orders” not to mention Jones, his nonprofit Southeast Consortium for Equitable Partnerships (SECEP), or discussions that occurred at the Joint Venture Board meetings with the SFPUC.
Like Kelly and Walton, Jones has direct ties to Nuru, who gave Jones the “ratepayer advocate” contract while he was being bribed by Recology Group Government and Community Relations Manager Paul Giusti to push the rate increase through with the Refuse Rate Board. But on the website ratepayeradvocatesf.org Jones and his colleagues at RDJ Enterprises did little to advocate for customers, sugarcoating the increase of $5.70 a month for an “average single-family home” by leaving out increases over the next three years and the fact that, without rebates, proposed charges would increase by an average of 23 percent the first year. In the end, Recology got most of what they wanted from the Refuse Rate Board, which included City Controller Ben Rosenfield, Harlan Kelly, and then City Administrator (and Harlan’s wife), Naomi Kelly.
Despite his connection to Kelly, Ellis, and Nuru through Community Benefits and the Recology ratepayer hike scandal, Jones is still getting millions of dollars in contracts. His biggest is the SFPUC where, despite my exposé and an equally scathing NBC Bay Area investigation, he has a Community Benefits consulting contract running from August 2011 to September 2026. The contract was originally for $1.3 million, but Jones has charged the SFPUC $3.7 million to date. Jones also has five other SFPUC contracts or subcontracts totaling $410,000, for which he has billed $672,240. Additionally, he has $101,815 in pending purchase orders related to his construction services contract for the SFPUC’s Headworks Facility, led by one of those now infamous Joint Venture Boards.
The San Francisco Port Commission has also been very good to Jones. His first work for the agency was a $77,000 contract for public outreach in 2017. His company RDJ Enterprises inked a second deal that same year for community relations related to the Seawall Resiliency Project. Right before the Port Commission unanimously awarded the $40 million, 10-year deal to their handpicked team, President Willie Adams said, “Dwayne, I love you.” It was an odd moment of blatant cronyism, even by San Francisco standards.
WHAT DID DENNIS KNOW?
Someone not familiar with the City Family might believe the many exits and indictments mean corruption has been flushed from the SFPUC, but in fact, it may be entering a new phase with Breed’s appointment of City Attorney Dennis Herrera to replace Kelly as general manager. Kelly certainly saw benefits to having Herrera on his side — he maxed out his contribution to the 2019 city attorney reelection campaign, despite the fact Herrera was running unopposed.
Herrera has bragged for years about pursuing corruption at City Hall, but if you look closer, it’s a lot of smoke and mirrors. Nuru’s decades of corruption flew under the noses of four mayors — but it also flew under the nose of Herrera, who was first elected city attorney in 2001 and was reelected to serve in the role for 20 years. Occasionally Herrera would announce an investigation into a city department, usually on the heels of the Feds, but it’s hard to ignore his own words: “For 10 years, Nuru’s questionable ethics and repeated misappropriation of taxpayer dollars didn’t seem to merit a slap on the wrist from Ed Lee. Now, as mayor, Ed Lee thinks it merits a promotion,” Herrera said when he challenged Ed Lee for mayor in 2011.
In other words, Herrera acknowledged Nuru’s bad behavior from the time he was first elected city attorney in 2001, and even pointed it out while running for mayor in 2011 a full decade later, yet he never investigated Nuru, instead standing by while the FBI did all the work and eventually took Nuru down.
If Herrera was aware of Nuru, how could he not be aware of Kelly and Ellis? Sources within the Community Benefits Program, who declined to be named for fear of retribution, told me that Herrera was aware. “He has an attorney sitting in on all meetings who reports back to him,” said one insider. “The city attorney has to sign off on everything.” That same person confirmed, as I reported in July 2020, that Ellis did indeed decide which nonprofits got money via a “proprietary scoring system,” and Jones was her favorite middleman with Joint Venture Boards. “Dwayne told them what nonprofit donations would help earn the best scores from Juliet,” the source explained. “They made donations to those nonprofits, Juliet gave them the highest scores, and they got the big jobs.”
In minutes I obtained, Jones appeared at the AECOM/Parsons Joint Venture Board meeting held at SFPUC headquarters on Aug. 8, 2018. Jones, who also had a consulting contract with AECOM/Parsons, presented an updated Community Benefits contribution plan, effectively telling his client which nonprofits to pay on behalf of his other client, the SFPUC. One of the beneficiaries was his Southeast Consortium for Equitable Development, but the payment was withheld pending legal review by the city attorney’s office. The minutes note that the city attorney conducted a review of “all community-based organizations on the FY 2018-19 plan. All organizations were vetted and 501c3 status verified. There were no findings.” On Aug. 25, once Herrera’s office gave the green light, the Joint Venture Board processed the payment and Jones received a $25,000 check at his office on Bayshore Boulevard.
All of this comes back to the Community Benefits pay-to-play scheme, which has never once been questioned by the city attorney’s office. And apparently, Herrera’s team still has “no findings” regarding Dwayne Jones and his many nonprofit entities: according to DataSF, Jones has more than $500,000 in billable contracts. Search under Southeast Consortium and you’ll find even more. While Jones felt enough heat from the media to move his wife and business partners off the board of the Southeast Consortium, he replaced them with his sister-in-law and two college friends.
Herrera has zero experience managing a complex water, power, and sewer utility with a $1.5 billion budget. So why would Breed want him? One insider, who declined to be named for fear of retribution, said it smelled like quid quo pro: “She nominates Dennis in April, and in August, while the Board of Supervisors is on summer break, he helps get Breed’s $23,000 ethics fine ratified.”
Others believe there’s a more nefarious reason for Breed’s selection: keeping it all in the City Family. Said one insider, “These scandals took out a lot of London’s friends who she depended on to keep her off the radar. Herrera has proven he can keep secrets.” Whether or not Herrera is keeping secrets, signing off on Community Benefits pay-to-play schemes and overlooking major players like Ellis and Jones doesn’t bode well for the public interest. Since Herrera took over Kelly’s post, there has been no forensic audit of the Community Benefits Plan and the scandal plagued program continues unfettered.
WHERE DOES THE INVESTIGATION GO UNDER RAMSEY THE RINGER?
The Biden administration (at the urging of Senator Dianne Feinstein) chose Harvard trained former prosecutor turned criminal defense lawyer Ismail “Izzy” Ramsey to take over the role of Northern California’s top prosecutor from Anderson. Since former mayor Willie Brown has bragged often about his close relationships with Feinstein and now Vice President Kamala Harris, it’s likely Brown and Harris whispered Ramsey’s name in Feinstein’s ear.
It seems cruel to potentially use a clearly frail Feinstein in an attempt to squash the current corruption investigation which not only has ties to Brown, but to Governor Gavin Newsom and to Harris herself. Recommending Ramsey could well be the last major decision of Feinstein’s distinguished career.
A closer look sheds light on Ramsey’s ties to Brown, Harris, and Nuru. Perhaps the biggest conflict of interest comes from a Brown interview in the Nob Hill Gazette, where he admitted contributing to Nuru’s legal defense. “He’s got a criminal defense; I am contributing to his criminal defense budget . . .” he said. Who was Nuru’s defense attorney? Ismail Ramsey. According to one insider, Brown, alongside Ramsey, pitched a group of wealthy individuals about ponying up a large sum of money to cover Nuru’s legal costs.
Ramsey’s relationships with Brown and Harris go way back, making him a de facto member of the City Family. In fact, Ramsey’s father, late Alameda County Judge Henry Ramsey Jr., is a longtime friend and colleague of Brown’s, serving as co-counsel with him on a number of cases.
The elder Ramsey was also incredibly close to Harris. A March 2014 obituary noted “Ramsey celebrated his 80th birthday in January at a party at the Claremont Hotel in Berkeley that included many well-wishers and friends, including state Attorney General Kamala Harris.”
In a 2020 New York Times profile about Ramsey’s stepsister, Yetunde Beutler, and her Paris-based beauty line Essènci, author Thessaly La Force wrote, “Her father, Henry Ramsey Jr., was a civil rights attorney, judge, law professor and dean (he also happened to be an early mentor for Vice President-elect Kamala Harris).”
When Harris was elected to the vice presidency, Beutler wrote on the Essènci website, “I thought about Kamala, the first woman to hold the office of VP … Many years ago, she was a girl my brothers played with, and that my father would play a role in her path to greatness.”
Beutler explained that her father was friends with Harris’s late mother, Shyamala, whom he met at the University of California, Berkeley in the 1960s where he was a law student, and she was a student in biology. “They were both part of a Black student intellectual teach-in group called The Afro-American Association along with other folks like Ron Dellums, Willie Brown, Don Warden, and Ken Simmons.”
Through that friendship, which continued as their kids grew up and played together, Beutler said, “my father offered to help Shyamala’s daughter, Kamala … Among other things, he helped her get into The University of California, Hastings College of Law school, as a judge he swore her into the California Bar, and he recommended her for a job at the Alameda County district attorney’s office. Behind the scenes he was there at pivotal points in her rise to make an introduction or offer his advice.”
Thus far, Harris has emerged unscathed from the City Hall corruption scandal, slinking stealthily up the political ladder with help from mentors like Brown and Henry Ramsey Jr. As head of the United States Attorney’s Office for the Northern District of California, David Anderson was a nagging thorn in Brown’s side and perhaps a worry in the rearview mirror for Harris, a rooster guarding San Francisco as he dug deeper, moved closer to the top, and kept the foxes at bay.
Ramsey was confirmed when senior United States Senator Chuck Schumer from New York cast a singular “aye” in an empty room. With connections from Brown to Nuru to a childhood friend turned Vice President of the United States, California now has a veritable fox guarding the White House — and San Francisco City Hall.
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