By Thomas K. Pendergast
Financial transaction records between the San Francisco Recreation and Park Department and the non-profit San Francisco Parks Alliance are now the focus of a subpoena, after a unanimous vote by the Government Audit and Oversight Committee of the San Francisco Board of Supervisors.
Fallout from the arrest of former SF Public Works Director Mohammed Nuru on allegations leading to a federal charge of wire fraud – after he was caught up in a wide criminal corruption investigation by the FBI – has put the SF Parks Alliance in the spotlight after revelations that it was among the “friends of” type of non-profits involved in moving money around for Nuru’s department.
“We are zooming in to really look at a very problematic relationship that a non-profit named San Francisco Parks Alliance has with our city departments, but specifically with our Recreation and Park Department,” said District 1 Supervisor Connie Chan, who called for the hearing. “The BLA (Budget and Legislative Analyst) report that you will see later today will actually validate what we thought all along; that there was a lack of adequate controls against the possibility of corruption and financial transparency between the Parks Alliance and the Rec. and Park Department.”
The BLA’s Director of Policy Analysis Fred Brousseau told the Committee that the Parks Alliance has had a relationship with Rec. and Park since 2003, starting with the Conservatory of Flowers.
Chan said she was disappointed with the reports about Nuru’s and the Public Works’ relationship with SF Parks Alliance, plus she was concerned that “instead of pausing that type of agreement between Rec. and Park Department and Parks Alliance, it seems to me that General Manager, Phil Ginsburg, had decided to double down.”
“We have complied with every rule in the book about this and will continue to, and welcome, frankly, any increased efforts at transparency, because that helps all of us,” Sarah Madland responded, representing Rec. and Park.
“The Parks Alliance has not been accused of or found to be involved in any wrongdoing as part of the investigation into the government corruption,” said its Board Chair Liz Farrell. “I also wanted to say that, throughout this whole process, we are committed to being transparent. We are committed to working with the City … so that we can continue to improve our parks and public spaces.
“The City controls the contracts and we follow the terms of the contracts, so there is a lot of information that came out that is really a City issue. So I defer to the city attorney who oversees those contracts,” Farrell said.
An auditor with the City Controller’s Office, Amanda Sobrepena, told the Committee that from 2015 through 2020, the SF Parks Alliance received $11.9 million from multiple city departments and serves in this role for both SF Public Works and Rec. and Park.
Contractors and building permit holders made donations to the Public Works subaccounts at the SF Parks Alliance, Sobrepena explained. Much of that spending from the subaccounts were related to “staff appreciation,” including department initiatives with volunteers and merchandise, generally at Public Works’ direction. These subaccounts really operated like a city account, she said, because invoices were directed and approved by Public Works employees and tracked by both Public Works and the Parks Alliance. However, all of this occurred outside of the City’s established financial and procurement systems.
“As a result, they were not subject to the same review and control that would otherwise exist to comply with the City’s accounting and procurement policies and procedures,” Sobrepena said. “This arrangement ultimately created the opportunity for unethical steering of purchases to occur.”
She said from July 2015 through January 2020, “we found that Public Works paid eight contractors a total of $572 million through contract purchase orders or other voucher payments. The Department of Building Inspection issued 218 building permits to seven of those entities.
“During this same period, these entities donated $966,000 to the Public Works subaccounts at the Parks Alliance,” she elaborated. “The risk here is that when city contractors or building permit applicants or holders donate to non-city organizations, it can create a ‘pay-to-play’ relationship, or the appearance of one. In this arrangement, the non-city organization serves as an intermediary between the City and the contractor or building permit applicant or holder who donates money to the organization in the hopes of influencing the City’s contractor permit approval process.
“During our review period, Parks Alliance made payments totaling $978,000 to support Public Works activities and as directed by Public Works. These payments either went to vendors for the purchase of goods and/or services, or were payments to individuals, primarily city employees, who were reimbursed for costs they had incurred,” she said.
“Of the $720,000 that (SF) Parks Alliance paid to vendors, more than half went to just five vendors. These funds were largely spent on staff appreciation and events that benefited City employees.”
Chan asked her if she had any information that Rec. and Park has a similar practice with subaccounts involving the SF Parks Alliance.
“We did collect a lot of information from all the departments, including Rec. and Park, but we only assessed Public Works’ subaccounts,” Sobrepena responded.
“So, knowing that it actually does have a close relationship with the Rec. and Park Department, and I have identified that the subaccount practice is not appropriate and problematic, you have not asked for that information from Rec. and Park to see if they actually have subaccounts with Parks Alliance or not,” Chan said.
“That is correct,” Sobrepena said. “We did not dive deeper with Rec. and Park.”
“I think that is a critical piece of information, don’t you think, for us to obtain?” said Chan.
“Yes, we can go back and look into it, talk to the controller about adding it to our Public Integrity Reviews,” Sobrepena responded.
“That’s great,” said Chan. “Do you know when can we expect that information?”
Sobrepena could not give an immediate answer but said she could come back with that information.
“No problem,” Chan said. “I just want you to know that I have asked for that information directly to the Rec. and Park Department as well and I also have yet to receive that information.”
Chan then called on the Committee to issue a subpoena to the SF Parks Alliance for more information, including the number of subaccounts they have with Rec. and Park, the expenses and transactions with those subaccounts dating back five fiscal years and identifying the funding sources for the subaccounts.
The motion to issue the subpoena was passed by the Committee unanimously.
Chan explained that she thought it worthwhile to get this information in the hope of avoiding the possibility of continuing practices with the potential to encourage corruption.
“Are we now setting ourselves up for a two-tier system for those who can pay to play, literally, and for those who cannot afford access to our public space?” Chan asked.
Categories: board of supervisors