Harlan Kelly is consulting as a city-certified business

OPINION

In September, I wrote a column for the Marina Times called Cronyism is still alive and well at City Hall about the way Mayor London Breed thanks her close friends with appointments on commissions and boards — and she doesn’t even try to hide it. One of the friends I mentioned is Victor Makras. On August 21, he and his wife Farah Makras threw a private birthday party for the Mayor at Kokkari Estiatorio, an upscale Greek restaurant in the Financial District, with Breed mentor Willie Brown and his longtime partner Sonya Molodestskaya also in attendance. The caption for the photo on Instagram reads, “a simple celebration, a gathering of friends,” but the custom cake by Camisha’s Cakes, designed to look like one of Breed’s houseplants, was likely in the $500 range. Prices at Kokkari aren’t cheap, either, with a bowl of avgolemono — a traditional egg-lemon soup with chicken and rice — costing $11.75.

As I wrote in September, a quick Internet search brings up numerous photos of the Makras’s schmoozing with Breed. Victor Makras is a politically connected real estate broker with a long history of serving on city commissions (in fact, there probably hasn’t been a year since Brown was mayor that he didn’t have an appointment). Makras resigned from the Port Commission last year over alleged ethics violations tied to the Mission Rock development project. The Makras’s regularly host the mayor and the former mayor at their Marina Boulevard home for exclusive parties and political fundraisers. The couple even hosted a reception for Breed’s mayoral campaign in 2018 (with a “suggested contribution” of $500 a head). Farah Makras was also photographed with Breed attending a Nov. 7, 2019 birthday party for socialite Gorretti Lo Lui at The French Laundry, star chef Thomas Keller’s Michelin-starred restaurant in Yountville, held just one day after and in the same room as Gov. Gavin Newsom’s infamous dinner. 

Breed gave her friend Farah a plum appointment to the board of the Booker T. Washington Community Service Center, where she serves as vice president. In 2018, the old site at 800 Presidio Avenue was demolished and replaced with a $55 million, 70,000 square foot mixed-use building featuring a childcare facility, youth programming space, recording studios, gymnasium, and 50 units of affordable housing.

Makras was accused by another board member, Julian Davis, of “hiring unqualified or grossly overpaid Breed affiliated insiders.” During the search for a new executive director, Makras proposed bringing Breed’s close friend Brenda Wright on board as a consultant — and paying her $175 per hour. After the meeting, Davis says he spoke with Makras by phone, questioning why she wanted to waste the center’s resources to pay for a pricy consultant at twice the going rate. Makras replied there would be no added cost for the center because Breed promised to pay for the excess cost of Wright’s fees with additional grants from the city. Davis asked Makras if she had an issue with that, and she responded “absolutely not.”

On October 19, the Feds revealed that former San Francisco Public Utilities Commission head Harlan Kelly was facing new federal charges of bank fraud and conspiracy to commit bank fraud, linked to a wide-ranging bribery scheme in which he allegedly traded insider information on city contracts for free meals, jewelry and international trips. I wrote about Kelly before his first indictment in two Marina Times columns. The March 2020 column was about his travel escapades with assistant general manager and girlfriend Juliet Ellis, including a personal junket to Mexico and a trip where they snacked on tequila and Cheetos in their room. Those travel records were subpoenaed by the FBI in June 2021.

My July 2020 column exposed the blatant pay-to-play scheme at the San Francisco Public Utilities Commission disguised as a social impact program. A federal investigation into that program is ongoing, which has Kelly/Ellis underlings leaving the SFPUC like rats leaping from a sinking ship.

On June 24, former U.S. Attorney Dave Anderson announced that Walter Wong, a longtime contractor and permit expediter, agreed to plead guilty to fraud, conspiracy, and money-laundering charges. But in my July column I also exposed that numerous workers inside the SFPUC told me not only did Wong do work for Kelly and his wife, former city administrator Naomi Kelly, but “Harlan bragged about it.” According to the Department of Building Inspection, the Kellys pulled three permits on their home located at 1622 11th Avenue in San Francisco between 2011 and 2014. The authorized agents on each of those permits is 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. After a Nov. 2020 raid on the Kelly home, the U.S. Attorney’s office arrested Harlan Kelly on multiple fraud charges.

The most recent federal indictment links two of Breed’s longtime allies in the Willie Brown machine — Harlan Kelly and Victor Makras — with federal charges of bank fraud and conspiracy to commit bank fraud, in to a wide-ranging scheme. Additionally, both defendants face charges of honest services wire fraud and conspiracy to commit honest services wire fraud.

According to the Feds, Kelly and Makras conspired to defraud the mortgage lender Quicken Loans in a $1.3 million real estate loan to Kelly. Seeking to get more funds at a lower rate, Kelly and Makras allegedly falsely inflated the amount of debt that Kelly owed to Makras’s real estate investment firm. Kelly allegedly concealed other outstanding debts, including thousands of dollars for that famous Walter Wong home remodel, and a $70,000 personal loan from Makras. Federal prosecutors allege that Kelly and Makras used the fraudulent funds from Quicken Loans to pay those debts.

If convicted, each count carries a maximum statutory penalty of 30 years imprisonment and a fine of $1,000,000 for Makras and Kelly.

You would think Kelly would be lying low, but on October 1, 2021, he registered “Diamond Management Consulting LLC” as a city-certified business, located at his house (the same house where wife Naomi registered "NK Strategies" in March of this year). While it says the business has been registered since 1970, it officially started at the home of the Kellys October 1, 2021.

That’s not all. Kelly actually established Diamond Management Consulting LLC with the State of California on January 16, 2021. He also set up a website to solicit jobs, and he links to a series of SFPUC videos to sell his services.

All of this begs the question: Is the City Family so entrenched, so arrogant, that members can be slapped with multiple federal fraud charges and have prison time hanging over their heads yet still go on with business as usual? Apparently so — even in the house that Wong built.