SAN FRANCISCO, CA — The latest assessment in the Controller’s and City Attorney’s Public Integrity Series scrutinizes three San Francisco Public Utilities Commission (SFPUC) procurements that were the subject of a federal criminal investigation. Former SFPUC General Manager Harlan Kelly, who oversaw the contracts in this assessment, was sentenced on March 18, 2024 to four years in prison for honest services bank fraud, bank fraud, and conspiracy.
The Controller’s Office and City Attorney’s Office concluded that while there are some improvements to be made, the abuse of City processes was caused by willful corrupt conduct and defiance of rules rather than inadequate controls or complicit SFPUC staff. Former SFPUC General Manager Kelly abused his position of power and undermined the integrity of City procurement, despite existing rules about accepting gifts, conferring advantages on suppliers, disclosing relationships that would pose a potential conflict of interest, and entering into contracts without a competitive process. Under new leadership, SFPUC reports it has strengthened its internal controls and ethical environment.
“We can have the most comprehensive and foolproof policies in place, but they’re only as infallible as the people entrusted to enforce them,” said Controller Greg Wagner. “Nobody is above the rules, regardless of seniority, degree of influence, or any other factor — and the courts have determined as much. This case shows just how consequential tone at the top is, and how integral it is to foster workplace cultures where staff are empowered to speak up when they see red flags at any level.”
“This unlawful conduct erodes public trust and undermines the work done by thousands of San Francisco public servants every day,” said City Attorney David Chiu. “There is no place in City government for corruption or self-dealing. Our offices remain committed to take any necessary action to eliminate corruption in our City and root out those who abuse public trust.
As a complementary recommendation to fostering an ethical organizational culture of transparency and restricting senior management’s ability to override departmental and city policies, the Controller’s Office is encouraging more regular education about the Whistleblower Program and the protections afforded by it. The Whistleblower Program, administered by the Controller’s Office, is critical to the City’s ability to fight abuses and lapses of public integrity by city employees and contractors. As provided for by the San Francisco Charter, the Controller’s Office ensures that complaints are investigated by departments with the appropriate jurisdiction and independence from the alleged wrongdoing. Anyone may file any allegation of improper or illegal public activity with the City’s Whistleblower Program.
Since the corruption charges against former Public Works Director Nuru were filed in January 2020, the U.S. Attorney’s Office has criminally charged 18 other city employees and contractors of the City. Future assessments by the Controller’s Office and City Attorney’s Office include an update on the status of City contracting with suspended entities affiliated with Dwayne Jones and a review of processes related to grant solicitation, monitoring, and oversight.
