What Have Our Corrupt City Done with the Money???

Key Newsom Ally Charged With Misuse of Public Funds
Randy Shaw
The Chronicle’s Sunday front-page expose on the channeling of illegal campaign donations from power-broker Julie Lee to Secretary of State Kevin Shelley missed a key point: Lee is a close advisor, major fundraiser and sitting Commissioner for Mayor Gavin Newsom. Only a few days after Newsom circumvented city ethics laws to free up a supervisor’s seat for a mayoral appointment, the mayor is now confronted with allegations of ethical and even criminal wrongdoing on the part of a close ally and member of his administration.

Credit the Chronicle for breaking the story of how Julie Lee set up a nonprofit—the San Francisco Neighbors Resource Center-- that secured state funds for building a community center and then diverted the money to Kevin Shelley’s political campaign. But as is so often the case, the Chronicle focused on the wrong target and failed to connect the dots.

Kevin Shelley was the recipient of the illegal funds, but anyone familiar with the former Supervisor would know that he would never knowingly participate in an illegal scheme to launder campaign money. Despite the Chronicle’s focus on Shelley, the story provided no evidence that he even could have known that public money had been funneled to his campaign.

Shelley, like Willie Brown and Gavin Newsom, sought to build westside Asian-American political support by associating with the ethically-challenged Julie Lee. Brown appointed Lee to the Housing Authority Commission despite her not having supported him in either mayors race. While serving in the Assembly, Shelley secured the state funds for Lee’s nonprofit to construct the community center. Secretary of State Shelley now employs Andrew Lee, Julie Lee’s son.

Oddly, the name of Mayor Gavin Newsom never appears in the Chronicle story. Lee’s close relationship to the Mayor is omitted despite a story where space was certainly not limited: the piece took up half the front page, and was 63 paragraphs long.

On the night before Mayor-elect Newsom’s inauguration, Julie Lee organized a major fundraiser for the Mayor. Two days later she held another fundraiser to reduce the campaign debt of her close political ally, Gavin Newsom.

Newsom made campaign ethics the centerpiece of his campaign, and has repeatedly and publicly questioned the business practices of Walter Wong. The Chronicle has dutifully echoed Newsom’s attacks on Wong, who rebuffed requests by Julie Lee and others that he support Newsom in the Mayor’s race.

There are two rival political factions in the city’s Asian-American community, and Wong and Lee are on opposite sides. By attacking and seeking to undermine Wong, Newsom scores points with Lee and her allies.

Lee’s conservative westside Asian-American voter base strongly supported Newsom in the December runoff. Since many of these voters are angry at the Mayor over his support for gay marriage, the Mayor has been careful to maintain his close relationship with community power-broker Julie Lee.

According to the Chronicle, Lee’s nonprofit failed to use state funds for the purpose they were awarded and instead directed the funds to individuals who then donated the money to Shelley’s Secretary of State campaign. If someone without Lee’s powerful political friends engaged in such behavior, we would be looking at multiple felony counts and jail time.

But there’s much more to the Julie Lee story than simply the misuse of public funds and the violation of nonprofit laws.

Lee has been associated with a series of questionable real estate dealings involving illegal demolitions, wrongful evictions, and misrepresentations to the California Department of Real Estate. She has evaded public attention for these acts for the same reason that her newly-formed nonprofit got the state grant it misspent---because she raises money and gets votes for politicians and they take care of her in turn.

Mayor Newsom has said time and time again that the unethical practices of the past must stop. He has promised to end “business as usual” in the city and told the media that they should hold him accountable for failing to do so.

To this end the Mayor must start requiring his political allies and financial backers like Julie Lee to meet the same ethical standards he asks of his political adversaries.

Julie Lee is currently President of the San Francisco Housing Authority commission. Mayor Newsom should demand that she take a leave from the Commission pending resolution of the charges surrounding her nonprofit.

The Mayor should also audit all funds his campaign raised from Julie Lee fundraisers to ensure that her nonprofit was not engage in additional siphoning of public funds. A list of all those attending these fundraisers should be made public so that the city is reassured that no illegal donations occurred.

District Attorney Kamala Harris has devoted extensive time to combating the scourge of lap dancing and prostitution in topless clubs. Now she can show she cares as much about political corruption. Harris should either file charges against the politically connected Ms. Lee or publicly explain why the facts raised by the Chronicle do not rise to criminal wrongdoing.

Newsom and Harris have skated for months on their youthful images and the carefully burnished “next generation” theme. But setting a strong tone against ethical violations by a political ally and fundraiser is a real test of leadership.

The city is watching how both will respond.

Send feedback to rshaw [at] beyondchron.org

"FOLLOW THE MONEY"

May 9, 2001
Press contact: Mark Westlund, 415/934-4814; pager: 415/739-6011

NEARLY $12 MILLION APPROVED FOR BAYVIEW, POTRERO HILL PROGRAMS


SAN FRANCISCO ‚ In an effort to get the money where it's needed most, the Commission on the Environment awarded grants totaling nearly $12 million to community environmental health and energy programs in Bayview Hunters Point and Potrero Hill. The Finance Committee of the Board of Supervisors approved the Commission's award recommendations unanimously today, which frees the funds for distribution to the community.

In total, $8,614,393 has been approved for thirteen community projects, and an additional $3,000,000 has been earmarked to support priorities identified by the Mayor's Environmental Health and Energy task force. The task force, chaired by District 10 Supervisor Sophie Maxwell, was called together to identify solutions to ongoing environmental problems in Bayview Hunters Point and Potrero Hill.

In a process that started with public hearings last September, the Commission on the Environment developed and oversaw a grant program open to both community groups and city departments. The grant funds were made available by the California Public Utilities Commission for projects intended to address neighborhood environmental issues arising from the sale and possible expansion of the Potrero Hill power plant, as well as the shut down of the Hunters Point power plant.

"Bayview Hunters Point and Potrero Hill carry a heavy environmental burden for San Francisco," said Environment Commission vice president Parin Shah, who is also program director for the Bayview-located San Francisco League of Urban Gardeners. "It's great to be able to get a significant amount of money directly into the community to help."

The programs selected by the Commission on the Environment, and approved by the Board of Supervisors, are:

ARC Ecology: $396,911 for community info center, including on shipyard cleanup and emergency alerts.
Bayview Hunters Point Advocates and Hetch Hetchy Water & Power: $1,500,000 for design, installation and maintenance of alternative energy facilities.
Department of Public Health: $330,000 for environmental health outreach.
Greenaction: $150,000 to launch an education campaign pertaining to superfund site cleanup and power plant shutdown.
Health and Environmental Resource Center: $500,000 for planning expansion of existing center.
Literacy for Environmental Justice: $897,942 to create a "living classroom" at Heron's Head Park.
M. Cubed: $1,500,000 to train residents how to conduct energy audits and improve energy efficiency.
Potrero Hill Neighborhood House: $475,000 to conduct an energy retrofit of this neighborhood-serving building.
Strybing Arboretum: $1,500,000 to establish horticultural jobs training program.
Tetra Tech and Potrero Hill Middle School: $355,540 to install solar panels and windmills at the school.
Trust for Public Land: $300,000 for improvements to the waterfront recreational facility at India Basin Shoreline.
Young Community Developers: $409,000 for job training program on identifying and abating hazardous materials.

The Money Is For Any Project That Will Shut-Down The Hunters Point Power Plant, and The Sale Or Expansion of The Potreo Hill Power Plant. The Low-Income Community of Color Did Not Get One Dime Of This Money.