Report sheds light on Nuru’s nonprofit donor scheme

City contractor payments to Parks Alliance spent at direction of Public Works director

An arrangement between former Public Works head Mohammed Nuru and a nonprofit that collected nearly $1 million in donations for his department lacked oversight, opening the door for city contractors to “pay to play.”

Such were the findings of a report Thursday from the Controller’s Office that criticized the relationship between Public Works and the nonprofit San Francisco Parks Alliance and offered 10 recommendations for reform.

The Controller’s Office began analyzing the relationship after federal authorities arrested and charged Nuru with fraud in January as part of a corruption investigation that has since implicated seven other defendants.

The Parks Alliance has collected $966,247 in donations for Public Works from city contractors and businesses with building permits since 2015. Those funds were largely spent at Nuru’s direction on holiday parties and events for his staff as well as merchandise and volunteer programs.

The report found that the arrangement “created the opportunity for unethical steering of purchases to occur” by operating outside the normal channels.

“Although some purchases appear to be appropriate,” the report said that others may have been made out of favoritism or to skirt city rules.

Among those paid by the Parks Alliance at the direction of Public Works were companies run by permit expediter Walter Wong and restaurateur Nick Bovis, who have both been charged alongside Nuru in the corruption scandal.

“We have put forward actionable recommendations to correct loopholes that seemingly normalize unethical practices that undermine faith in public actions,” said City Controller Ben Rosenfield in a statement.

One of the loopholes identified is the lack of a city regulation requiring department heads like Nuru to report behested payments, or donations that are made at their request for governmental or charitable purposes.

The requirement currently only applies to elected officials and commissioners.

While Nuru did not have to report behested payments, he was required to avoid soliciting donations from “restricted sources.”

Yet Nuru solicited donations from companies with business before Public Works to pay for a 2019 holiday party for both his department and the City Administrator’s Office in alleged violation of city ethics laws.

City Administrator Naomi Kelly, who appoints the Public Works director, was aware of the solicitation, the report found, but her spokesperson said she did not know who donated the funds.

“She was not aware of the individuals or organizations that were being solicited by Mr. Nuru,” said Bill Barnes, her spokesperson. “She was aware that the event was paid for with private funds.”

Mayor London Breed issued an executive directive in response to the report fulfilling some of its recommendations.

That includes requiring department heads to report behested payments and departments to craft formal contracts with organizations that collect donations on their behalf.

In the report, the Parks Alliance said it had attempted to formalize its relationship with Public Works last year but “this effort was ignored.”

“The Parks Alliance states it did not know that its fiscal agency was being used unscrupulously by city officials,” the report said.

Breed said groups like Parks Alliance “provide important philanthropic support for our parks, our libraries and other important civic services.”

“But we need to ensure that this support is not tainted with any perception or risk of ‘pay to play’ politics,” Breed said. “Many departments already follow strong protocols with these organizations, but the goal is for every department to meet the highest standard of transparency.”

Supervisor Matt Haney said the report shows department heads can currently “shake down” contractors for donations without disclosing the payments.

“This loophole creates a situation where contractors can access business with the city or receive preferential treatment because of donations given, rather than work that has been done,” Haney said. “This is a massive disservice to the residents of San Francisco and a blatant violation of the public trust.”

Haney plans to introduce legislation next week in response to the report.

mbarba@sfexaminer.com

jsabatini@sfexaminer.com

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