City suspends contractors involved in ongoing corruption scandal

San Francisco is suspending five individuals charged in the City Hall corruption scandal and their companies from receiving contracts under a new local law aimed at keeping government clean.

The defendants, Nick Bovis, Alan Varela, William Gilmartin, Florence Kong and Walter Wong, are the first to be temporarily barred from doing city business under the newly implemented legislation that allows local officials to block contractors from engaging in city business while their criminal cases are pending or while the debarment process against them is underway.

The legislation, introduced by City Attorney Dennis Herrera last August to speed up the lengthy debarment process, was approved by the Board of Supervisors and signed into law by Mayor London Breed last December.

“If there is enough evidence to charge someone with a crime, they should not be receiving City grants or contracts while their case is being decided. It’s that simple,” Herrera said Monday in a statement. “This will help ensure that contractors have a level playing field, the public benefits from qualified companies, and those who try to cheat the system don’t profit.”

The debarment process allows San Francisco to suspend contractors for up to five years for willful misconduct. The suspended companies are Bovis’ SMTM Technology LLC, Varela and Gilmartin’s ProVen Management Inc., Kong’s SFR Recovery Inc. and Kwan Wo Ironworks Inc., and Wong’s W. Wong Construction Co., Inc., Green Source Trading, LLC, and Alternate Choice, LLC.

Bovis was the among the first to be charged in the scandal last January when he and former Public Works director Mohammed Nuru were accused of attempting to bribe an airport commissioner to help secure a restaurant spot at San Francisco International Airport. He has since pled guilty and agreed to cooperate with the FBI.

Last September, federal authorities accused Varela and Gilmartin of bribing Nuru with expensive meals and a tractor delivered to his vacation property for insider information about an asphalt plant project along the waterfront. The duo has disputed the allegations.

Wong is a well-known permit expediter who has agreed to plead guilty and cooperate with the FBI after being accused last June of arranging trips, meals and free labor for Nuru. He has since told the FBI he bankrolled a family vacation for former Public Utilities Commission head Harlan Kelly and ex-City Administrator Naomi Kelly.

While Harlan Kelly has been charged, his wife has not. But both resigned.

Kong is the only defendant to be sentenced in the Nuru scandal. She has admitted to bribing Nuru with a $37,000 Rolex watch for help obtaining business and to lying to the FBI. She was sentenced to one year and a day in prison last month but is not expected to serve her sentence until the COVID-19 pandemic has subsided.

The FBI investigation is ongoing and more defendants are expected to be charged.

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