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New details in political corruption case reveal SF’s alleged ‘pay to play’ culture

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Keith Jackson exits the Phillip Burton Federal Building in San Francisco, Calif. July 1, 2015. (Natasha Dangond/Special to S.F. Examiner)
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After more than nine months of back-and-forth over whether to keep evidence sealed from the public, new details in the case of three San Francisco politicos charged with bribery and corruption emerged Thursday after prosecutors said they would file the arrest affidavit in a public but heavily redacted form.

The new details seem to paint a picture of nearly invisible corruption that thrives in San Francisco’s gray areas of the law.

Specifically, the new documents — many of them transcripts of FBI wiretaps — appear to show in detail how pay to play corruption works in San Francisco and how widespread that system may be.

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SEE RELATED: Public officials named in new findings from FBI probe of ‘Shrimp Boy’ Chow

On Thursday, Keith Jackson, a former school board president turned political consultant, former Human Rights Commissioner Nazly Mohajer and former commission staff member Zula Mae Jones pleaded not guilty for their parts in allegedly taking bribes and laundering political campaign donations to retire Mayor Ed Lee’s campaign debts in exchange for favors.

The trio had held off on entering pleas while defense attorneys fought efforts by the prosecution to keep details of the case under seal, a move that attorneys said hampered their ability to defend their clients.

SEE RELATED: Former SF officials plead not guilty in corruption case

Prosecutors had until now only made a few of the charging documents public, although they allowed the defense attorneys to have access to them in a remote location.

“We eat, sleep money in this town. We go to bed, we dream about money,” Jones told an undercover FBI agent posing as a businessman in a May 2012 wiretapped phone conversation, according to a document released Thursday. “We wake up, we dream about money. Here there’s no limit, if you got the right hook up.”

The redacted affidavit offers the first new details in months about the case, which emerged from the federal prosecution and investigation — code named Operation White Suit — of Raymond “Shrimp Boy” Chow and his Ghee Kung Tong organized crime operation in Chinatown. That investigation, which sparked a separate but linked political investigation — code named Operation Frank Discussion — eventually led the conviction of former state Sen. Leland Yee.

The mayor has denied any knowledge or part in the alleged corruption, and the documents released Thursday indicate there is no evidence he was involved.

“As we have said during this ongoing criminal case, the mayor believes the people who engaged in this alleged criminal activity should be held accountable. People in public service should be held to the highest standard and there is absolutely no place in San Francisco for this corruption, especially in city government,” the Mayor’s Office said in a statement Friday.

“Judge Breyer thoroughly vindicated Mayor Lee and said there ‘was no evidence whatsoever’ of wrongdoing by Mayor Lee,” the statement continues. “The mayor and his campaign fully complied with the law and his thousands of campaign contributions were thoroughly vetted. The Ethics Commission even conducted a comprehensive audit of the campaign’s finances and determined there was full compliance. Today’s documents do not change any of this.”

Players

Jackson –who was convicted in federal court in 2015 for corruption along with Yee and remains in custody– along with Mohajer and Jones are alleged to have worked with “Michael King,” the pseudonym of an undercover FBI agent also known as Undercover Confidential Employee 4773.

In 2012, King worked with the trio to launder thousands of dollars in campaign contributions to Lee’s campaign by bundling them into small sums, therefore bypassing the $500 individual limit, according to court documents.

Under Jackson’s direction, the donations went through a group of straw donors — one of them a former Lennar employee — as a way to hide where the money came from.

Affidavit

District Attorney’s Office investigator Eric Tejeda’s affidavit goes over details of the alleged crimes, many of which have already been released in federal filings in the Chow case. In the documents released Thursday, many names have been redacted, even though the same passages appeared in the federal filings and contained Lee’s and former Mayor Willie Brown’s names. Neither Lee nor Brown have been charged in connection with this investigation.

An image of the redacted FBI wiretap transcript between an FBI agent and Zula Jones in 2012.

An image of the redacted FBI wiretap transcript between an FBI agent and Zula Jones in 2012.

The District Attorney’s Office had successfully sought a protective order in the case, but defense attorneys have argued that prosecutors are only trying to protect the mayor from further embarrassment in connection with this case.

“They’re protecting someone,” said Deputy Public Defender Niki Solis, who is representing Jackson. “It’s all very troubling.”

The affidavit, which quotes FBI wiretaps and recorded phone conversations among the three defendants, alleges that the trio promised favors in exchange for the campaign contributions.

“The three also represented to UCE 4773 that he would get political access and favors in exchange for giving money to REDACTED — not just from REDACTED himself, but from Jones and Muhajer directly,” wrote Tejada.

In one taped phone conversation between Jackson and UCE 4773, in which Jackson asks for campaign contributions of $5,000 to $10,000 in exchange for favors from a newly elected politician — just as was done with Yee — Jackson is asked if Yee would mind that the agent gave money to Yee’s opponent in the 2011 mayor’s race.

“The campaign is over, shit, the dude is the REDACTED now…we need this guy,” Jackson allegedly said on Jan. 18, 2012.

An image of an unredacted FBI wiretap transcript between an FBI agent and Zula Jones from the Raymond "Shrimp Boy" Chow case.

An image of an unredacted FBI wiretap transcript between an FBI agent and Zula Jones from the Raymond “Shrimp Boy” Chow case.

In another exchange, the two speak about circumventing city campaign contribution rules. Jackson allegedly said that Lee’s supporters were looking for “anywhere from 10 to 15,” which Tejada notes is $10,000 to $15,000 in contributions.

“Yeah, you gonna, you gonna, you gonna have access,” Jackson told the agent in another conversation. “I’ll make sure of that.”

Jackson then allegedly told the agent that the exchange would go through two of Lee’s associates: Mohajer, who “raised [for] REDACTED…a shitload of money,” and Jones.

The scheme, according to a conversation between the agent and Jones, was needed to hide the source of the money.

“They got these stupid laws…we got these crazy rules and the way we do it is send the check to Keith. He will split it up but we will put your name in there,” Jones allegedly said to reassure the agent that the recipient would know who the money came from.

After speaking with the mayor, Jones told the agent that she would give him the access the favorable treatment he wanted once his check had arrived. “I gotta deliver for you, you know, you gonna be treating me the same way REDACTED treats me,” said Jones. “Get me the money, you gonna be saying get me the contract, so I’ll deliver.”

In a subsequent conversation, Jones told the agent what he will get for his contribution.

“This would be good uh, for just, you know trying to get that footprint in San Francisco and having his, having his blessing,” Jones allegedly said.

But she advised him that a sitdown can’t happen in City Hall because, “you can’t talk in that place.” Later in the wiretaps she said they must meet “outside of the City Hall, not in the City Hall, because a lot of things cannot be discussed in the City Hall.”

In another exchange, in which Jones told the agent what she can do personally for him, she noted that her position as compliance officer for the Human Rights Commission offered benefits for getting things done. “People tell you things. I got department people telling me stuff, I got, you know, they come to you, and that’s how, you know, you can’t do it alone, and I can walk in departments and I can get information and get things done without a lotta noise.”

In an April 2012 exchange with the agent, Jones again explained how things are purported to work in San Francisco. “Everything is about relationships and connections,” she said. “Course we have the public process…”

corruptioncase-1007

As they got closer to setting up the meeting between the agent and the mayor, Mohajer warned the agent how to handle himself.

“You can never mention what we did to him,” Mohajer told the agent in a March 16, 2012, exchange after he asked her about getting things done. “You can never say that because all the hell will break…he wouldn’t even meet with you if that happens.” Mohajer added that he couldn’t talk about the money openly or he will “shut down.”

“He’s pretty savvy, he knows that it’s always pay to play,” she allegedly told the agent. “You don’t say it to his face, you know what I mean.”

But she then told the agent that politicians can’t be trusted to get things done, according to the affidavit.

“You cannot um, rely on a politician on anything, you can rely on the people around the politicians,” she said, adding that she may be one of those people. “All the things that you know, as far as development in San Francisco [is] concerned, I can get that done.”

Then she further pointed how why she was the person the agent should be dealing with. “I’m, uh, chair of local business enterprise, which basically oversees about $8 billion dollars of contracts that The City gives out.”

The affidavit notes that in all, the agent gave $20,500 to help retire Lee’s campaign debts, $20,000 of which were “intended bribe money to Mohajer.”

Jones told the agent on May 30, 2012, to be careful with the document that lists the straw donors who would break up the illegal contributions the agent was giving to the Lee campaign. “I know what to do with it,” he said. “I know not what to do with it.”

Then she told him: “Never let the press know.”

Bay City News Service contributed to this report.

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